COVID-19 and Bankruptcy Repayment Plan

April 2nd, 2020
Posted By
Michael Ryan Jones
Young housewife paying bills
Right now, thousands of Americans are worried about the financial and emotional strain the novel coronavirus is having or will have on their families. With schools closed across the nation and some workers still being required to report on-site, there are many new expenses families are facing. Not only are there potential new costs, but there may also be a lack of income coming in, as some workers are being laid off and let go during this economic downturn due to COVID-19. This is only further complicated if you are someone who also has monthly payments as part of your Chapter 13 bankruptcy plan. But if you live in Ohio and you are having an issue with making your Chapter 13 repayments due to COVID-19 or need help in general with your bankruptcy repayment plan, what options exist for you? Jones Law Firm has some suggestions for you.

Modifying Your Chapter 13 Bankruptcy Plan Because of COVID-19

When you created your repayment plan, you never planned for a global pandemic to alter your employment and financial situation. And you aren’t alone. In a report by CNBC, “the coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%.” Because of this, many individuals will be looking for ways to cut costs and alter their monthly payments. So, how can you modify for Chapter 13 Bankruptcy repayment plan in Ohio during the coronavirus outbreak?

How to Modify Your Chapter 13 Bankruptcy Plan Because of COVID-19

To modify your Chapter 13 plan in Columbus and Reynoldsburg, Ohio, you must file a modification plan with the court. Right now, many courts are closed due to COVID-19 but are still taking filings. However, hearings are more than likely taking place over the phone. In your submitted modification plan, you must explain your change of income because of COVID-19. This may include the notice of lay-offs, childcare costs, etc. In some cases, you may be able to suspend payments via a hardship discharge instead of a modification to your repayment plan.

Chapter 13 Hardship Discharge - Bankruptcy Repayment Plan

A hardship discharge is a court granted a discharge of payments under your plan. However, you must prove three conditions to receive a hardship discharge:
  • Circumstances were beyond your control.
  • Your unsecured creditors received adequate payment.
  • Modification of your plan is not practical and has been denied by the courts.
It is important to note that a hardship discharge will not remove all payments. Only unsecured nonpriority debts will be discharged. Debts you will still be responsible for include spousal and child support, taxes, etc. In addition to modification or hardship discharge, some individuals may be able to convert their Chapter 13 bankruptcy to a Chapter 7 bankruptcy, however this is often very difficult to do. It is best to contact your bankruptcy attorney right away if you cannot make your repayments because of COVID-19.

Call the Columbus and Reynoldsburg, Ohio Bankruptcy Attorneys Today for Help with Your Bankruptcy Repayment Plan

Coronavirus has taken the entire world by surprise, unraveling lives in the most unimaginable ways. If you are experiencing financial distress or the burden of debts you cannot pay due to COVID-19, we encourage you to contact The Jones Law Firm for a free consultation about how we can help you through this difficult time. With offices in Reynoldsburg, Ohio, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio. Our attorney is available to work with you remotely to protect your financial and health interests.
Categories: Chapter 13 Bankruptcy