I filed for Chapter 13 bankruptcy in Scottsdale last year, but I can no longer keep up with my payment schedule—what are my options?

An Arizona Chapter 13 bankruptcy is a big financial commitment. For three to five years, you are expected to adhere strictly to a repayment plan that was designed to work with your current financial situation, including your income and current debts. What happens, then, if you lose your job or have a major medical emergency? Suddenly, the payment schedule that seemed so simple may become an unbearable burden.


Luckily, for many people, there is a solution to help you cope with your difficult new situation. If you have not received a Chapter 7 bankruptcy discharge within the last eight years, you may be eligible to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy.


In order to convert your case, you will need to qualify for a Chapter 7 bankruptcy just as you would if you filed for a Chapter 7 bankruptcy from the start. You will be required to pass the Chapter 7 means test, which compares your income and expenses to your current debt. While you may not have initially passed this test, if your financial situation has changed—such as losing a job or getting divorced—you may pass when your new circumstances are considered.


Once you pass the means test, the procedure for conversion is very similar to your initial Chapter 13 filing process. You will need to attend another meeting with a bankruptcy trustee, and address any new debts you have taken on since your last filing.


If you are feeling overwhelmed by your current Chapter 13 repayment plan, you do not have to continue to struggle alone. The Arizona bankruptcy attorneys at Curry, Pearson & Wooten are available to help you find a solution to your debt. Simply call us at 602-258-1000 or toll free at 888-929-5292 to discuss your options with an experienced lawyer today.