By: Daniel Stone
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What happens if I get sick or lose my job in a Chapter 13?
Very few of my bankruptcy clients make it through their Chapter 13 bankruptcy with no hiccups such as sickness or loss of employment. In fact some clients have two or three unexpected emergencies during their three to five year Chapter 13. So what can you do if you run into a situation where you are unable to make your Chapter 13 trustee payment for two or three months? The bankruptcy court allows debtors to file a moratorium motion requesting a reprieve from making the required Chapter 13 trustee payment for two or three months if the debtor can show a specific reason for the unexpected emergency and show that they have been in the plan long enough to demonstrate they can make payments in normal circumstances. For instance, a debtor who files a moratorium motion after only being in the Chapter 13 for three months will most likely be denied.What happens if you are on a wage order when the motion is filed? Please note that the wage order will not be rescinded. However, the Chapter 13 trustee will send you a check for each month the motion was approved for as long as the employer sends the trustee payments pursuant to the wage order.