Answer: If your income goes down during your Chapter 13 bankruptcy and you can no longer afford your monthly plan payment, you can to ask the court to modify your plan and reduce your payment amount. Whether the court will allow you to lower your plan payment will depend on a number of factors.

What happens if I dismiss my Chapter 13 plan?

Chapter 13 plans are voluntary and you can dismiss them freely. If you have a temporary interruption in income or an unexpected increase in your expenses, you can ask the court to modify your plan. The modification may reduce the payments or suspend the payments for a couple of months.

Can a chapter 13 trustee suspend the payments?

Some Chapter 13 trustees allow a debtor to suspend payments on their plans when there is an interruption in income. Alternatively, you may be able to modify the plan to lower the payments, for a while, or for the balance of the bankruptcy case.

Is there a moratorium on Chapter 13 payments?

(To learn more about the Chapter 13 plan, see the articles in The Chapter 13 Repayment Plan.) A plan moratorium gives you a break, usually for no longer than 90 days, from having to make monthly payments to the Chapter 13 trustee. The bankruptcy court may allow a plan moratorium, for example, if you face:

How are Debts Paid in Chapter 13 bankruptcy?

Some of your debts will be paid through your plan – which means you’ll pay them to the trustee who will then distribute payments to your creditors. Others might be paid outside of your plan – that is, you will pay the creditor directly.

Can my Chapter 13 plan payment be increased aft?

In addition to a change in income after confirmation of the Plan, the debtor may receive new property during the administration of the Chapter 13 case.

How can I modify my Chapter 13 plan?

In most cases, to file a motion to modify, you will need to obtain a hearing date, provide a written declaration as to why your plan payment should be reduced, and propose an amended Chapter 13 plan to the court. The trustee and your creditors will have a chance to review your proposed plan and object to it if they wish.