PSA: Your Bankruptcy Case is Not Set in Stone
At Schwartz Flansburg, we see Las Vegas bankruptcy cases in all shapes and sizes. While no two bankruptcy cases are the same, the one thing that remains constant is that your bankruptcy attorney should be your best ally before, during, and after the bankruptcy process. However, it is all too common for debtors to assume that they are left to their own devices if circumstances change during their bankruptcy plan. This could not be further from the truth, and in many cases, financial hardship can be avoided simply by reaching out to a bankruptcy attorney. For example:
I can’t keep up with my current Chapter 13 payments
If you are struggling to keep up with an existing Chapter 13 bankruptcy plan, there are several options to work something out, as long as you contact your bankruptcy attorney before you miss any payments. If you find yourself unable to meet your payment schedule, you may qualify for one of the following options:
Modify your existing Chapter 13 bankruptcy plan
If you are unable to make payments due to reduced household income, you may be able to modify your existing plan to lower your payments. Remember that the purpose of chapter 13 bankruptcy is to organize your debt into payments you can afford. If something happens in your household to affect your ability to afford your payments, the plan may be modified accordingly.
If there is a significant, long term loss of income in your household, you may qualify for a Chapter 7 bankruptcy, which would give your a fresh start for all discharged debts. Even if you did not qualify for one during your original filing, you may find that your new financial situation allows you to convert to Chapter 7. While the exemptions in bankruptcy remain the same for both Chapter 7 and Chapter 13, assets are treated differently in Chapter 7, so it’s important to talk to a bankruptcy attorney before making this decision.
Request a hardship discharge
In certain situations, you may qualify for a hardship discharge. To do this you need to be able to show that modification would not be feasible, that your creditors would receive at least what they would have received via liquidation, and that the circumstances that caused your inability to pay are through no fault of your own, and are not temporary.
I filed for Chapter 7 liquidation, but now I want to keep my property or assets
If you originally filed for a Chapter 7 bankruptcy, but have now decided that you want to keep your property, you may be able to convert your case:
If you can show that you can afford a Chapter 13 plan, you may be able to convert your case from a Chapter 7 to a Chapter 13 bankruptcy. Doing so will allow you the opportunity to work out a payment plan on assets such as your house, which would allow you to keep those assets rather than liquidate them.
I filed for Chapter 7 liquidation, but I want to get more than the liquidation value for my assets
During a Chapter 7 liquidation, your assets are typically liquidated as quickly as possible to satisfy your debts. However, if you want to act as your own trustee during the liquidation process, you may want to convert your case to an individual Chapter 11 bankruptcy instead.
Converting from Chapter 7 bankruptcy to Chapter 11 bankruptcy
Some assets may sell for a higher value, but finding a buyer may take more time than the average sale. In these situations, it may make more sense to convert your Chapter 7 case to an individual Chapter 11 bankruptcy. In a Chapter 11 bankruptcy, you act as your own trustee and manage the sale of your assets. This allows you to take more time to find a buyer and maximize the value from the sale of your assets.
Your bankruptcy attorney as a resource after bankruptcy
Even after your bankruptcy is completed, your bankruptcy attorney can still be a valuable resource for financial decisions beyond bankruptcy. For example, if you kept your house during your bankruptcy, but decide that you no longer want to keep it, you may be able to short sale your house.
What happens if I miss payments without contacting an attorney?
If you do not contact a bankruptcy attorney prior to missing payments on your plan, your entire case may get dismissed. If this happens, all of your previous payments will essentially have been for nothing. Additionally, you will lose the Automatic Stay protection meaning creditors may resume debt collection attempts including foreclosure, wage garnishment, and collection calls. Lastly, if your case is dismissed, and you decide to file again at a later date, the new filing would only be protected by Automatic Stay for 30 days. Again, all of this can be avoided simply by working with your bankruptcy attorney before falling behind on your payment plan.
My bankruptcy attorney won’t respond. Can I call a different attorney?
If the attorney you originally filed your bankruptcy with is unwilling or unable to modify your case, you can file for substitution of counsel throughout the life of your bankruptcy. This can be a simple process but, depending on the complexity of your case, there may be a slight learning curve while your new attorney becomes familiar with your case history.
Life is unpredictable, and your financial situation is not set in stone. Likewise, your bankruptcy plan exists to provide you with an opportunity to manage your finances in a way that works for you based on your current situation. If you find your finances becoming unmanageable at any point during the bankruptcy process, you owe it to yourself to reach out to a bankruptcy attorney.
Schedule Your Free Consultation by calling 702-385-5544.