What Happens If I Cannot Fulfill My Chapter 13 Obligations?

: Reese Baker & Associates

  Filed under: Chapter 13

chapter 7 bankruptcy, chapter 13 bankruptcy, money management, debt relief, bankruptcy, attorney, attorneys, laywer, lawyers, texas, houston, bryan, college station, tx, law firm,Many people who choose the route of bankruptcy protection either do not choose to proceed with a Chapter 7 that virtually eliminates all unsecured debt but does not allow you to protect certain assets or are unable to secure a Chapter 7 and choose or are forced to take the route of a Chapter 13 bankruptcy. Chapter 13 bankruptcies allow the debtor to establish, with the help of the courts and the trustee, the opportunity to set up a structured re-payment plan that allows them to repay their debts over a period of time.

A very common question is what happens if you are unable to follow through with this re-payment plan because of an unexpected job loss or illness? The first step if you find yourself in this predicament is to contact your trustee and see what your options are.

These may include attempting to get a deferment from your payments until the situation is resolved by other means of employment or until the individual is able to begin working again if it was an illness that prevented re-payment. Another option may be to try and convert the Chapter 13 to a Chapter 7.

Converting your Chapter 13 to a Chapter 7 bankruptcy will allow you to wipe out any unsecured debts but may result in certain assets being no longer exempt and you may have to relinquish your vehicles and even possibly your home for selling and settling of debts. Contact and discuss the situation with your trustee or a qualified bankruptcy attorney to get the best advice for your particular situation.