What To Do If You Can’t Make Chapter 13 Plan Payments? Part 6 Of 6.
By Kevin Gipson, New Orleans Bankruptcy Attorney on Jul 31, 2009 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy
In the previous articles in this series I discussed various options that are available to a debtor who is in a Chapter 13 Bankruptcy but who can no longer make his Plan payments.
Those options are:
- A Hardship Discharge.
- Modification of your Chapter 13 Plan to allow Suspension of payments for a period of time or to Extend the length of the Chapter 13 Plan to lower the monthly payments.
- Dismissal of your Chapter 13 bankruptcy.
A final alternative to continuing to pay a Chapter 13 Plan is to convert your Chapter 13 bankruptcy to a Chapter 7 Bankruptcy.
Just like a debtor in a Chapter 13 bankruptcy has an absolute right to dismiss his bankruptcy, so does a debtor in a Chapter 13 bankruptcy have a right to convert his case to a Chapter 7 bankruptcy.
Often the only reason a Chapter 13 bankruptcy has been filed is to save a house from foreclosure. If the debtor has not been able to keep up the payments on the mortgage to his creditor and the creditor has gotten the Bankruptcy Court to lift the stay (so the creditor can go forward and sell the house) there may be no reason to continue with a Chapter 13 bankruptcy.
Under such circumstances it might make sense to convert the Chapter 13 bankruptcy to a Chapter 7 bankruptcy.
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