Filing Chapter 13 bankruptcy in Illinois means going through a lengthy process that ends with a plan. But not being able to make your payments is not the end of the world. You have two options to defer your bankruptcy payments altogether or reduce the monthly amount.
When you need to pause payments
When you file for Chapter 13 bankruptcy, you sign an agreement and have a legal obligation to make your payments on time. Every individual has to follow a payment plan for three to five years straight. But during this time, any disaster can happen to your finances and require the temporary postponement of regular payments.
How to postpone
Obtaining bankruptcy allows you to receive a second chance, but it is not your only chance. The first step is to have a reasonable explanation for why you cannot make the scheduled payments. Refusing to pay because you’re covering the costs of a mortgage on a second home is not a good reason and may result in the rejection of your bankruptcy case. Next, file a motion to suspend the payments altogether or modify the terms of your payment plan.
In some cases, your motion could be dismissed and leave you without any bankruptcy protection. The next option is to pay the delinquent payments before pursuing another option.
What to do when your finances change
A lot of people have myths about bankruptcy that every agreement is set in stone. You have a number of options to help you get through this difficult financial period. Your Chapter 13 bankruptcy payments can be deferred and modified under certain circumstances.