What Happens If I Can’t Afford Bankruptcy Payments in Chapter 13?

can't afford bankruptcyWhat happens if you can’t afford bankruptcy payment obligations?

Chapter 13 bankruptcy is a great way to get your finances in order after struggling to make ends meet. However, for some people, even filing Chapter 13 isn’t enough to get them back on track.

If you’re having trouble making your payments, the first thing you should do is contact your bankruptcy attorney or trustee. They may be able to help you modify your payment plan so that it’s more affordable.

If you can’t afford to make your payments, you may also be able to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy. This means that all of your assets will be sold off to pay creditors, but any remaining debt will be discharged.

Is a Bankruptcy Conversion Free?

There may be some cost to convert a chapter 13 bankruptcy to a chapter 7. There may also be some fees associated with filing the new bankruptcy petition and any required documents. Be sure to speak with an attorney to discuss all potential costs before converting your case.

What are the Risks of Converting a Chapter 13 Case?

One of the biggest risks of converting a Chapter 13 bankruptcy to a Chapter 7 is that your creditors may object to the conversion. This could lead to your case being dismissed, which would mean that you would have to start all over again with your bankruptcy proceedings.

Another risk is that, if you convert your case to a Chapter 7, you may not be able to discharge all of your debts. This is because some debts, such as child support or alimony, are not dischargeable in a Chapter 7 bankruptcy.

Finally, if you have a lot of assets, you may lose some of them converting to a Chapter 7 bankruptcy. This is because Chapter 7 bankruptcies involve a lot of asset liquidation. So, if you have a house or a car that is worth more than the amount of your debt, you may have to sell it to pay off your creditors.

Is a Chapter 13 Conversion Your Only Option?


If you can’t make your Chapter 13 bankruptcy payments, you can file a motion with the court to ask for a hardship discharge. This might allow you to be discharged from your payment obligations without completing the full repayment plan.

A bankruptcy hardship discharge is a court-ordered relief from your debts. It is available in Chapter 7 and Chapter 13 bankruptcies and is meant to help those who are facing extreme financial difficulties.

To qualify for a hardship discharge, you must prove that:

  • You cannot afford to make your regular payments
  • You have made a good faith effort to repay your debts
  • You are not ineligible for a discharge due to fraud or other misconduct
  • Granting the discharge would not be an abuse of the bankruptcy system

If you meet these requirements, the court may grant you a hardship discharge. This means that your remaining debts will be forgiven and you will no longer be responsible for paying them.

A hardship discharge can provide much-needed relief. However, it doesn’t completely wipe out all of your debts. You may still be responsible for certain types of debts. This includes child support or alimony payments, student loans, and taxes.

Can’t Afford Bankruptcy After Filing Chapter 13?

If you’re concerned you can’t afford bankruptcy repayment obligations or you have questions about bankruptcy in general, contact R. Flay Cabiness, II, P.C. at (912) 417-5041 (Brunswick, GA); (912) 809-2141 (Hazlehurst, GA) or; (912) 324-3176 (Jesup, GA) to schedule a consultation.

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