Factors That Could Make Your Bankruptcy Payment Grow
People who are making payments under Chapter 13 bankruptcy repayment plans in Nevada may have circumstances that cause their payment amounts to increase. Factors that may cause a bankruptcy payment to go up include working a lot of overtime hours, the end of child support or alimony, paying off an automobile loan and paying off a loan against a retirement account. If a payment increases to the extent that a debtor is having trouble making the payments, there are several things that he or she can do to make the payment more manageable.
Factors That Can Lead to a Payment Increase
In a Chapter 13 bankruptcy case, the debtors make payments to repay a portion of their debts during a repayment plan period that lasts from three to five years. When people enter into repayment plans, they agree to pay a set amount each month until the plan periods end. However, there are some factors that can cause an increase in the payment amount during the repayment period.
If a person has worked a lot of overtime in a six-month period, the trustee may take an average of that amount and request that the debtor submits an amended plan with higher payments. Overtime that is not consistent will be unlikely to cause a payment increase. Other situations that may lead to an increase in the payment includes paying off a car loan during the plan or paying back a 401(k) or another retirement account from which a loan was taken. People whose child support or spousal support obligations end during the repayment plan may also have an increase in their payments. The trustee might assume that these changes mean that the debtors have more disposable income with which they can make their payments.
Dealing With an Increase
If debtors are struggling to pay their higher payments under their Chapter 13 plans, they have a few options. They can try to change jobs so that they can make more money. They can sell some of their assets and use the money for the payments. They can also use their tax refunds to make their payments. Finally, they can extend their plans from three to five years to secure smaller payments.