Running on Empty: “What If I Can’t Make My Chapter 13 Payments?”
Chapter 13 bankruptcy is about payments. After all, it’s a “payment plan bankruptcy.” But what if you just can’t make the payments?
A motion for moratorium of payments is a motion you can file to suspend your plan payments for a period of time.
For good cause–something other than “I just don’t think I will have the money to make my plan payments”– we can file a Motion which is a request to suspend plan payments for a time period. This time is usually used to pay for an unexpected necessary expense like a medical bill or large car repair, or lack of income due to a short period of unemployment. Use only one or two months if you need it, because you never know when you’ll need another one. The payments missed must be made up either by putting them at the end of your plan (if you have room to do that – max plan time is 60 months) or by raising your remaining payments to cover the missed payments.
Tell your lawyer if you’ll have problems making your plan payments
Going on maternity leave? Getting laid off for a few weeks? Having surgery? These are all income interrupters. If you’ll be experiencing an income interrupter, let your bankruptcy lawyer know ahead of time. He’ll then be able to file your motion with the (hopefully) legitimate reasons you have to suspend your payments.
Your creditors and the bankruptcy trustee have the right to object to the motion, but usually (let’s say almost always) the only person you need to “sell” your cause to is the trustee.
What if my Trustee objects!
Keep in mind that even if the trustee objects, you have the right to be heard by the judge. If you really do have some legitimate reason to suspend your payments–through no fault of your own–the judge will grant your motion.
Don’t keep your attorney in the dark.
With any problems in any type of bankruptcy, let your attorney know immediately so that she/he can take necessary steps to keep your case on track.