How to Postpone a Chapter 13 Payment

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Your attorney can propose a modification to your Chapter 13 plan if you have good cause to modify the plan. If you need to skip or postpone a Chapter 13 plan payment, you must file a proposed plan modification. The Chapter 13 trustee and your creditors will have time to object to the proposal. Additionally, the proposal must be approved by the court.

Figure out if your plan will still work if you miss a payment. Your Chapter 13 plan is set up to repay your creditors according to the Bankruptcy Code's requirements. If you are paying your mortgage through the plan and the trustee does not have enough money on hand the month you postpone your payment, the mortgage may not get paid enough, and an arrearage may accrue. You may be able to pay your mortgage company with your modified plan, but your unsecured creditors may receive less than they were supposed to receive, or your car may not be paid in full as it should. Your attorney will calculate whether a missed payment will negatively impact your plan and what you should do as a result.

Prepare supporting documentation. If you need to skip a Chapter 13 plan payment because you will not be receiving a paycheck, get a letter from your employer stating that this is the case. If you need to skip a payment because you need the money for some other reason, prepare an affidavit and swear under oath regarding why you need to keep the money from going to the trustee.

Prepare a plan modification. Your attorney must file a document with the court requesting a plan modification to postpone a plan payment. The plan modification should detail why you need to postpone the payment, how it will affect your creditors and how you intend to make up the payment later. Your attorney will file the proposed plan modification with the court and send a copy to the trustee and to your creditors who will have the opportunity to object to the proposal. If no one objects, the court may modify the plan according to the proposal. If the trustee or a creditor objects, the court will hold a hearing.

Notify your employer if the plan modification is approved and your plan payments are wage deducted. Many districts require that plan payments be deducted from your pay. If you have a wage order and your employer takes your Chapter 13 plan payment from your paycheck, you must provide your employer with the court order approving your plan modification. You may have to obtain a new wage order after the postponed payment.

Tips & Warnings

  • Notify your attorney as soon as you find out you might not be able to make a payment. The earlier she finds out, the better your chances of obtaining the relief you need.
  • If you file a plan modification, the court may not approve it. Discuss every option with your attorney and try to have a backup plan. Postponing a plan payment is difficult, and some judges will not do it.
  • If you are successful and your wage order stops, do not miss any more payments than your plan modification provided. If you postpone one payment, make sure the wage order is in effect again for the upcoming payments, and if your payments do not come out of your paycheck, send them in yourself until the wage order begins to work again.

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