Quick Answer: When Chapter 13 payments become unaffordable due to changed circumstances, debtors should first request a payment modification from their bankruptcy attorney, then consider converting to Chapter 7 if modification isn’t possible. Converting to Chapter 7 may be preferable unless significant assets like home equity would be at risk.
“Dear Steve,
We have paid 15 months into chapter 13 bankruptcy. house payment went up , insurance went up, ex hasn’t paid child support which my attorney says isn’t figured into payment, but I can’t afford payments this high anymore, I can’t even buy a pair of shoes for my kids, what do I do.
My husband suggests divorce and changing to chapter 7. any suggestions?
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Dear Amy,
Before you even start consider getting a divorce the first thing to do would be to contact your bankruptcy attorney and see if you can get your bankruptcy payment modified to adjust for your change of circumstances.
If the bankruptcy attorney says the bankruptcy payment can’t be modified then you need to talk to them about converting the bankruptcy to a Chapter 7 bankruptcy.
I’m sensing that there was something originally which held you back from filing a Chapter 7 bankruptcy. What was it? Do you have a tremendous amount of equity in your home or some other asset that would have been at risk?
Is the debt just in his name?
I need some more information to better help you. Post your answers in the comments section below.
If you’re behind right now and worried about a dismissal hearing, see my crisis guide on what to do when you’re falling behind on Chapter 13 payments — it walks through plan modification, hardship discharge, and conversion before dismissal happens.
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