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Chapter 13 Bankruptcy Plan Payments & COVID-19

Published March 16, 2020 by Sasser Law Firm
When COVID-19 Interferes with a Chapter 13 Debtor’s Ability to Make Plan Payments

Already many Americans are feeling the economic impact of COVID -19. This includes persons working in the foodservice and travel industries. School shut-downs may also have a negative impact as workers either work less or spend more, based on childcare. Many Chapter 13 debtors are on tight budgets and do not have much margin in their financial life.

Here are some options that are available if the debtor is struggling with plan payments:

  1. Seek a modification of the plan. It may be that the plan payments can be reduced based on changes to the budget or based on surrendering collateral that is being paid through trustee disbursements.
  2. Convert the case from Chapter 13 to Chapter 7. There are many limitations and considerations to evaluate, but this is an option worth reviewing.
  3. Allow the case to be dismissed. It may be that a new case is filed if appropriate.

Sasser Law Firm is committed to quality representation from the filing of a Chapter 13 case through its completion. As always, contact us if you have questions about your bankruptcy filing.

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