What Happens if I Default on a Chapter 13?
Posted By
Majed on Jul 8, 2011 7:20am PDT
Sometimes debtors who were in a position to repay a portion of their debt find themselves unable to complete the process during the course of a Chapter 13 repayment plan. Because an individual's home, vehicle or other vital property is tied to the repayment plan in most cases, the option to convert is there if financial circumstances change.
Conversion means that a debtor files a motion with the court saying "I am unable to make my agreed upon payments for my Chapter 13 and would like to convert the case to a Chapter 7. Once this happens, the debtor may have to complete a new means test to ensure they meet the requirements. Further, the debtor will have to attend a new Meeting of Creditors and be sure to follow the guidelines for Chapter 7.