COVID Do I Have to make My Plan Payments

Hi, I got an email from Ellen today, asking what happens if she can’t pay her chapter 13 planned payments, because of the covert pandemic. She’s concerned that, being out of work or higher expenses, we’ll keep her from making all her planned payments. I’m attorney Joe Jeppson, a consumer bankruptcy specialist here in Kansas City, serving clients in both Missouri and Kansas since 2006. The short answer is that you gotta make your plan payments. A chapter 13 plan is a voluntary agreement between you and the court where you make certain payments and the court keeps your creditors off your back. If you don’t make the payments, they’re not going to keep the grantors off your back. And so you got to make all those payments. The good news is that we’re able to shift a bit when those payments are being made because the cares act gave us an extra provision letting you extend your plan from the five year maximum to seven years if you fall behind because of the pandemic.

So, for example, if you lost your job or you were furloughed and you missed three or four payments, typically we’d have to go back and ask the court to treat you as current or right now, and then resume regular monthly payments. There may be a little bit higher to make up those payments over the next couple of years before the end of your plan. Now we can just go back to the regular monthly payments that you had and just tack those payments on the end. So instead of going five years, you may go five and a half, but you don’t have to raise the payments. So the bad news is we still got to pay for that house and the car if you want to keep it. Good news is you still get to keep the house and the car and there’s some extra help to make sure that you have the time you need to get everything back on track.

So if you’re having trouble with credit cards or medical bills, payday loans, or you need that help with a house or a car, give me a call for a free consultation. We’ll sit down and figure out the details of what’s going on in your unique situation and, put together a good plan of action for how to get from where you are to where you want to be. A lot of our clients come in feeling very scared or overwhelmed or even embarrassed by the phone calls and letters and lawsuits, in their finances and being able to just sit down and give them good information and put together a plan of action gives them the peace of mind they need to sleep at night. So give us a call for your free consultation and we’ll help you on your way. Okay.