Can’t Afford A Chapter 13 Bankruptcy, Convert To Chapter 7

After filing for bankruptcy, most Americans would like to think that the worst is over. In today’s ever-changing economy that is not necessarily always true. Since the bankruptcy code changed in 2005 and the real estate market melted down in 2007 a lot of people have found their way into a Chapter 13 bankruptcy. Chapter 13 has really found a niche market because of the unusual downturn that America suffered in the real estate market. People who make too much money to qualify for Chapter 7 bankruptcy, decide that Chapter 13 is a good idea to keep the family home. The only problem with that Chapter 13 bankruptcy is not involved in coming up with a doable payment plan, but more along the lines of keeping it up. A Chapter 13 plan takes 3 to 5 years to get your discharge. As everyone knows that’s a long time and a lot of stuff can happen. With the high rate of unemployment in many companies cutting back no one knows when their head might be on the chopping block.

The good news is, there are always options when an individual faces problems in this type of bankruptcy filing. Anything can happen, you or your spouse could get laid off or a family member comes down with a serious illness.꽁머니 Any of these things could set of families financial well being into a tailspin. When changes arise it’s best to call your bankruptcy attorney immediately. Waiting could end up in the failure of the ability to make the Chapter 13 plan payments which would result in a dismissal. A bankruptcy attorney has the knowledge of how to modify the bankruptcy plan. The only thing is they are not mind readers and if you don’t call him they wouldn’t know until it’s too late.

If your financial problems are only temporary, your bankruptcy attorney can ask the court to modify the plan to excuse the payments that were missed. If it’s going to be for a longer period of time they also can ask to reduce the payments until you get your life back on track. Another option the bankruptcy attorney can push for is to lower the amount that’s paid to unsecured creditors, which would drop the payments substantially. The Chapter 13 Bankruptcy Trustee knows that things change in people’s lives and doesn’t expect to never modify the current plan.

In today’s current job market if the loss of a job is causing the problem there is always the option to convert to a Chapter 7 bankruptcy. Nowadays, when people get laid off they might even need to consider changing their profession. Jobs out there are pretty scarce in what’s available doesn’t pay very well. Sometimes it becomes inevitable that there’s no way that you’ll be able to continue on in converting to a Chapter 7 bankruptcy might be the solution.

When converting from a Chapter 13 bankruptcy to a Chapter 7, the debtor needs to discuss the situation with their bankruptcy attorney. There are many other things that might have to change. Because of the changes to an individual’s financial situation, it might be time to let the house go. This is the time that the debtor should take a serious look at what they think their future will look like. This is where a bankruptcy attorney can really help navigate through the intricacies of the bankruptcy code.

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