Can my payments be restructured in chapter 13 bankruptcy in case of sudden unemployment

The duration of a chapter 13 bankruptcy is usually 3-5 years. This is a fairly long period of time. Important changes can take place in an individual’s life during this period. The job market right now is not too stable. So what if you lose your job a couple of years after filing chapter 13 bankruptcy?

If you face the above stated unfortunate situation then your first task will be to inform your attorney. The attorney will take necessary steps to restructure your payment plans. Nonetheless, your payments won’t get reduced simply because you are unemployed.

For instance, a debtor may choose to pay a minor percentage of money (say 1.5%) towards his unsecured debts (like payday loans, medical bills, loans etc. The rest of your money goes towards your secure debts like mortgage, car loans etc. Here, it is evident that your secured debts are much more than unsecure debts. In this case it is not possible to lower the monthly amount to be paid to the creditors. Or else the trustee will receive insufficient money to pay for your secure debts regularly. To make it clearer, if the Trustee does not receive enough payments from you to pay off your secure debts after lowering your payments then your case might be dismissed. In such a situation you must surrender at least one of your assets. For instance, you might have to surrender one car if you have more than one vehicle.

The circumstance of every debtor is unique. So you need to contact your attorney and let him know about your situation. Try to understand the ratio of your secured and unsecured debt. But yes, it is possible to lower your payments in case you lose your job during bankruptcy.