Can I Lower My Monthly Payments in a Chapter 13 Bankruptcy?
Yes, with the help of an experienced Florence bankruptcy lawyer from Reed Law Firm, P.A., you might lower your monthly Chapter 13 payments by modifying your repayment plan. Discuss unexpected life changes with our compassionate South Carolina bankruptcy modification team.
Lowering Monthly Chapter 13 Payments in Florence, S.C.
When you file for Chapter 13 or wage-earner’s bankruptcy, the court calculates your plan term and payment amount based on your monthly income and expenses. Most repayment plans under Chapter 13 last from 3 to 5 years, and judges understand that a lot can happen during the repayment period. If your income or expenses suddenly change, an attorney might petition to lower your monthly Chapter 13 bankruptcy payment by showing a substantial change in circumstances. Gather any evidence related to the change, including hospital bills or termination paperwork, to accelerate any necessary changes.
Qualifying Changed Circumstances
You cannot generally modify a repayment plan due to minor financial changes. Instead, you must submit evidence of significant changed circumstances. Qualifying events permitting you to lower your Chapter 13 bankruptcy payments under 11 U.S.C. § 1329 often include the following:
- Job loss
- Reduced business income
- Birth of a new child
- Unexpected medical expenses
- Interest rate adjustments on mortgages
- Increased health insurance costs
- Catastrophic weather events
You must provide documentation of these changes and, if necessary, proof that you did not cause or contribute to unexpected job loss or reduced income. The court may refuse to modify a Chapter 13 bankruptcy plan if you quit your job without cause. Always consult an experienced bankruptcy modification attorney before filing a petition to modify a confirmed bankruptcy plan in South Carolina.
Options for Chapter 13 Bankruptcy Modifications
Depending on the circumstances, the bankruptcy judge may reduce your monthly payments but extend the length of your bankruptcy plan. This could mean increasing a 3-year plan to a 5-year plan or reducing the overall amount owed. How the court modifies your plan depends on the unique circumstances of your case and dedicated legal advocacy. However, unsecured creditors may challenge the reduction and even ask for increased payments if your income improves after finding a new job.
Filing a Notice of Conversion to Chapter 7 Liquidation
In extreme circumstances, such as the loss of all reliable income or a significant medical event, your attorney might recommend filing a Notice of Conversion. This allows eligible debtors to convert a Chapter 13 bankruptcy to a Chapter 7 bankruptcy. Chapter 7 liquidation does not generally allow debtors to keep their homes and high-value assets, but it might eliminate all remaining eligible debts and monthly payments.
Attorneys for Eliminating or Lowering Chapter 13 Bankruptcy Payments in Florence, S.C.
Although you must experience a significant financial event, an experienced South Carolina bankruptcy law firm might help you lower or even eliminate monthly bankruptcy payments. Discuss your specific case with our Chapter 13 modification team today by calling (843) 679-0077 or connecting with us online.
