A Little Help For Chapter 13 Bankruptcy Debtors

There is a little help for chapter 13 bankruptcy debtors in the major stimulus package known as the CARES Act of 2020.  If you cannot afford to make your chapter 13 plan payments in full because you lost income due to the coronavirus, you may change those payments to as little as $50 per month until you can start earning income again.  When you increase your plan payments to the amount you were paying before you lowered your payments, you will have up to two additional years to complete your chapter 13 plan payments.

There may however be problems with the companies that the chapter 13 trustee is paying if you lower your plan payments.  For example, if the trustee is paying your mortgage or making your car payments, those payments will not get made if the trustee doesn’t get enough money from your plan payments.  If the trustee is making your mortgage payments and you need your chapter 13 plan payments reduced, you should immediately apply online for a mortgage forbearance.  If the trustee is making your car payments, ask your car lender for a temporary suspension of payments.

None of this is a perfect or complete solution to the problem of lost wages, but at least this may provide some relief instead of having your bankruptcy case dismissed.