I can’t pay my chapter 13

Part 1 – Work with your Trustee’s Office

 As bankruptcy attorneys, we frequently hear clients say “I can’t pay my chapter 13 payment.” Life happens. People get sick, miss time at work, lose jobs, get divorced and lose income. All of these factors, plus many more contribute to you being unable to pay my chapter 13 trustee payment. When you fall behind on your payments, your Trustee will file a formal Motion to Dismiss your case with the Court. The motion will allege how far you are in arrears and set a date for a hearing. Your normally don’t have a lot of time between when the motion is filed and your hearing date.

You need to do something! It’s hard sometimes. We understand that. But all the same, you are in a repayment plan to bring your house payments current, pay off your car, pay back the IRS or take care of other bills. The monthly trustee payment obligation continues even when your income doesn’t.

This article is one in a series of six articles discussing the various options available to you. The series is designed to help answer the I can’t pay my chapter 13 question.

Work with your Trustee’s office

Many times, when you are behind on your trustee payments, the best resource is the staff at your chapter 13 trustee’s office. As your lawyer, you would think that we have more pull with the trustee than you would. That is not always the case. We have found that sometimes discussing the I can’t pay my chapter 13 payment issue directly with your trustee’s office works better than your lawyer making a call.

Informal Payment arrangements

Most of the trustee’s staff members are willing to help you catch up your payments you’re your difficulty is due to a temporary thing like missing work from being sick. One of them is to allow you to make catch up payments through an informal payment arrangement. The procedure is simple, you make one and a half or one and a quarter payments over the next few months. The added payment helps bring you current, but the addition is not so much to be unreasonable. Nothing formal is set up. There is no motion with the court or a written agreement. This is why we sometimes encourage you to call the trustee’s office. You sometimes can get a better arrangement that we could get for you.

More time

Obviously, sometimes you just need more time to get your payments caught up. The Trustee’s staff can help make a recommendation with the trustee to give you more time. They can do this by recommending that your motion to dismiss hearing be reset 30 days or more. If it is tax refund time, just getting an additional 30 days is enough for some people to bring their trustee payments current.

For others, more time allows them to liquidate some assets, borrow from their retirement plan or restructure their spending to free up some cash flow. For many, it is just more time to allow them to secure a regular full time job. When you call your Trustee’s office and tell them I can’t pay my chapter 13, explain to them what your plan is to bring the payments current. If it is realistic and you are willing to put it into action, the staff can help give you more time.

Who the Trustee works for

It is important to understand that your Chapter 13 Trustee does not work for you. But he does work WITH you. It is in the best interest of your creditors to make sure you can keep making your payments. Your trustee can help with this by providing you some short term options to bring your payments current. So if the trustee can make some small accommodations for you, everyone wins: you win and your creditors win.

So don’t despair if you get a Motion to Dismiss in the mail. You are behind on your payments. But options are available. You need to be flexible and realistic. But if you just experience a short term setback, call your Trustee and tell them I can’t pay my chapter 13. You may be surprised by how willing they are to work with you to help you get caught up. Oh, and call your attorney as well and let him or her know what your plan of action is as well.

If your Trustee is David Peake, go to his web site to get the phone number of the office and the list of case managers

If your Trustee is William Heitkamp, go to his web site to get the phone number of the office and the list of case managers

Are you behind with your Chapter 13 Trustee payments. What can I do when I can’t pay my Chapter 13? Call your lawyer first and then call your Trustee’s office to see what options you may have with them.

The law firm of Busby & Associates has helped bring peace of mind to thousands of clients by working with them in their chapter 13 plans. We will do the same for you. So if you need help with your debts, please give us a call!

 
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