It has been said that the better laid plans of mice and men can often go astray. Filing a chapter 13 bankruptcy plan does not always guarantee success, even when you have legal expertise in your corner. Less than a third of all chapter 13 bankruptcy plans filed are ever completed. Things can change during a plan that can cause it to go astray from what was planned to happen. Here are four possible solutions when a chapter 13 bankruptcy plan goes astray:
Forbearance During a Chapter 13 Bankruptcy Plan
Things can suddenly change in regards to your income, and through no fault of your own. When this happens in a chapter 13 bankruptcy plan, it is important to let your attorney and the bankruptcy court know as soon as possible.
It is not a good thing to get behind or default on a chapter 13 bankruptcy plan. Depending on the circumstances of any default, this could result in a dismissal of your case with prejudice, meaning you cannot refile the case.
Forbearance is a legal term that means to delay a legal action for some particular reason. If you cannot make your payments on time during a chapter 13 bankruptcy plan, the first thing a bankruptcy attorney will usually do is ask the court for a forbearance on the payment. A temporary delay of payments can sometimes fix any temporary problem with income.
Modification of a Confirmed Chapter 13 Bankruptcy Plan
When a problem with income or expenses unexpected arises during a chapter 13 bankruptcy plan and a forbearance does not solve the problem, you can ask your attorney to submit a modification of your original plan that will honestly reflect the permanent changes.
A modification of a confirmed bankruptcy plan usually adds expenses to the cost of the bankruptcy for not only the debtor, but the lawyers and bankruptcy court. A modification of a bankruptcy plan is more than a single event; a modification is a process. A modification can be useful in solving a multitude of chapter 13 bankruptcy plan interruptions, but you probably won’t make many modifications as a filing individual.
Installments as a Solution in a Chapter 13 Bankruptcy Plan
There are certain circumstances in a chapter 13 bankruptcy plan that will allow the filer to make installment payments toward certain debts. Some of these debts may be related to secured debts, certain taxes, certain judicial related awards, filing fees, and other legal fees.
Most installments are paid through priority claims and made a part of the original bankruptcy plan, but there are always things that can change during a chapter 13 bankruptcy plan that may require an installment payment as a solution.
Conversion as a Solution to a Chapter 13 Bankruptcy Plan
When the better laid plans of mice go astray, nature usually inspires the survivors with having to start all over. Mankind and their plans are really no different.
Most chapter 13 bankruptcy plans fail because they are most often converted into a chapter 7 bankruptcy. When your income changes to the point you can no longer make your chapter 13 bankruptcy plan payments and you qualify to file a chapter 7 instead, there is not many good reasons to do anything but convert your plan to bankruptcy protection that will work for you.
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