A major part of a Chapter 13 bankruptcy filing is the repayment plan. If you fail to make the scheduled payments on time, your bankruptcy status could be in jeopardy. If you and your spouse filed together and he or she dies while the plan is still in effect, you have several options available to deal with the remaining payments.
Request a Modification
Modifications to repayment plan are sometimes allowed by the bankruptcy court if there is a situation that warrants it. In this instance, the loss of your spouse and his or her additional income could be a reason to allow for a modification. In order to receive the modification, you have to prove that you are no longer able to financially make the payments as agreed. You might have to submit additional financial information so that the bankruptcy trustee can help calculate exactly how much you can afford.
Request a Discharge
There is a possibility that you could receive a discharge of your remaining debts if you can prove that paying would cause a hardship for you. In order to qualify for the discharge, you need to submit financial documentation, such as your income and current bills, to the trustee. A discharge is only allowed if you can show that even with a modification, you could not afford to continue to make the payments.
It is important to note that if you received any insurance payments from the death of your spouse, the trustee could ask that documentation concerning it is submitted. The amount that you received could possibly be considered when determining whether or not you are allowed a discharge.
Continue Making Payments
If you are financially able to, you can also opt to continue to make the payments that you and your spouse agreed to. In the event that you do decide to continue the payments, you still have the option to ask for a modification or discharge in the future if you reach a point at which you cannot continue the payments. It is important that you let the trustee and your attorney know as soon as it is evident you cannot make the payments. Continue to make as many payments as you can until it is decided whether or not you qualify for the discharge or the modification.
Depending on your state's laws, there might be other options available to you. Contact your bankruptcy attorney as soon as possible to discuss those options and learn more.