Modifying a Chapter 13 Repayment Plan Due to a Medical Crisis

Chapter 13 bankruptcy requires filing parties to abide by a strict repayment schedule lasting three or five years. These plans are crafted carefully by taking into account a debtor’s income and recurring expenses. No one can be sure what the future holds though, and there are instances where a medical crisis or some other unexpected event makes it impossible for someone to honor the terms of the bankruptcy court’s order. 

The bankruptcy system recognizes the unpredictability of life events like sudden illness or injury and allows for adjustments to Chapter 13 repayment plans when circumstances change. If you’re facing a medical crisis, a qualified bankruptcy attorney can advise you about modifying your repayment plan.  

You’ll need to file a formal motion with the bankruptcy court, explaining the change in your circumstances and why you need to adjust your payments. This should include documentation of your medical condition, such as medical bills, proof of lost wages and letters from healthcare providers. After conducting a thorough review of existing obligations, ongoing costs for treatment and medication, your ability to earn an income and other factors, your lawyer can develop a revised repayment plan for the court’s approval. 

Options may include reducing monthly payments and extending the length of the plan. Creditors will have the opportunity to object, but the court will ultimately decide whether the new plan is reasonable and justified. Medical debt incurred after filing may not be part of your original plan, but it could affect your ability to pay existing priority debts, such as taxes or child support. If your medical crisis is so severe that you cannot complete your repayment plan, you may qualify for a hardship discharge. This eliminates certain debts without completing the plan, but is only available in specific circumstances.

If you experience a medical crisis, don’t delay seeking a modification to your Chapter 13 plan. Acting quickly can help you avoid missing payments, which could lead to the dismissal of your case. With the right legal support, you can navigate this process and adapt your repayment plan to reflect your new reality.

At Jeff Field & Associates, we represent Georgia residents in Chapter 7 proceedings and other types of bankruptcy matters. To learn about your options, please call 404-381-1278 or contact us online. Our offices are in Douglasville, Gainesville, Bogart, Lawrenceville, Marietta and Scottdale.