The terms of a chapter 13 bankruptcy agreement will have a strict repayment schedule that you'll need to adhere to, and they'll have potentially severe consequences should you fail to make your required monthly payments. Making each payment can be difficult, however, especially when you face an unexpected expense, like a major car repair. There may be hope, despite what the terms of your bankruptcy state, however. If your automobile breaks down and you won't be able to pay your creditors, talk with your trustee and see if the payment schedule can be extended.

Chapter 13 Bankruptcy Repayment Plans

Debts that are included in chapter 13 bankruptcies must usually be paid off within three to five years of the bankruptcy, according to United States Courts. For debtors who already have a five-year repayment plan, the law leaves little room for making adjustments. If your repayment schedule is only three or four years, though, your trustee may be able to extend it up to a maximum length of 60 months. This flexibility can give you a cushion to help manage paying for a major car repair without defaulting on your repayment plan.

Your Trustees' Decision

People sometimes avoid talking with their bankruptcy trustee when an unexpected expense suddenly arises. While a desire to avoid further financial discussions may be understandable, not communicating with your trustee will only hurt you. For, they have the power to extend your repayment plan if they deem it appropriate and wise.

When your car breaks down, you should let your trustee know as soon as you have an estimate for the repair. If it's an unmanageable expense, you can talk with them about delaying some payments or, if your car is totalled, taking on an additional car loan. Once they hear your circumstances and understand how you're handling your finances, they may decide to approve one of the two options. There's no guarantee that they will approve extending your repayment plan or taking on an a car loan, but they certainly won't if you don't share your struggles with them.

If you're uncomfortable talking directly with your chapter 13 bankruptcy trustee, you can ask your lawyer at a place like Howard S. Goodman Bankruptcy Attorney for help. They can talk with your trustee, if you'd like, or they can help you draft a letter. Whether they communicate in-person, over the phone, by email or through a letter, your bankruptcy attorney will know what details the trustee will need and how best to persuade the trustee to approve an extension or additional loan. The entire process starts with you, though. You must let your trustee know about the auto repair or ask your lawyer for assistance.