Your financial circumstances were already difficult, which is why you had to file for Chapter 13 bankruptcy. Renegotiating and restructuring your debt could help when your budget has very little wiggle room.
Only needing to make one payment each month as part of your repayment plan can make managing your finances simpler. The same is true for establishing payments based more on your income than on the balance of the accounts.
Unfortunately, it can also leave you in a difficult position when your income changes. If you lose your job while already in the process of seeking a Chapter 13 bankruptcy discharge, you may not be able to continue making the scheduled payments. What can you do in that situation?
You can ask the court to modify your repayment plan
The repayment plan works based both on the needs of your creditors and the income you have. The courts try to give each creditor some amount of repayment without straining your budget too far. When your income drops, you probably can’t make the same payments you originally planned to make.
You can file paperwork with the courts asking for a modification of your payment plan. Showing them documentation about your job loss and attesting to your search to find new, gainful employment can convince them to help you during this difficult time.
Asking for a modification is an important step as opposed to just not sending in payments. If you fail to make your payments as scheduled, you may not be able to receive your discharge. When financial circumstances change during bankruptcy, your approach to the process may need to shift as well.