Can I Restructure an Existing Chapter 13 Plan?
If you file for Chapter 13 bankruptcy and your plan is confirmed, but you are having difficulty with the payments given a change in circumstances, you are likely wondering: can I restructure an existing Chapter 13 plan? The US Bankruptcy Code does permit the modification of an existing Chapter 13 plan under certain circumstances, and it will be critical to discuss the specific details of your case with an attorney. In the meantime, our West Palm Beach bankruptcy attorneys can give you more information about making modifications to confirmed Chapter 13 plans.
Showing a Change in Circumstances
If you want to modify your confirmed Chapter 13 plan, or restructure the existing repayment terms, you will need to be able to show that you have experienced a change in circumstances. Under the US Bankruptcy Code, as the US Courts explain, a debtor will need to show that they are requesting a modification “due to circumstances that arose after confirmation and necessitate an adjustment.” While circumstances that meet this requirement can vary, common reasons include a loss of income for the debtor, or a change to a debtor’s monthly mortgage payment.
Trustee or Creditor Can Also File a Motion for Modification
While debtors are usually the ones who file a motion for modification, it is important for you to know that a trustee or a creditor with an unsecured proof of claim can also file a motion for modification when a debtor’s circumstances change. A debtor could receive a significant increase in pay, for example, or could inherit assets that necessitate a modification to the plan.
Filing a Motion to Modify a Confirmed Chapter 13 Plan
In order to modify your Chapter 13 plan, you will need to file a form known as a motion to modify a confirmed Chapter 13 plan, which might also be described as a motion to amend a confirmed plan. A party can file this motion at any time after the confirmation of the original payment plan and prior to the completion of the payment plan.
Ways the Plan Can Be Modified or Restructured
What should you expect in terms of the type of restructuring or modification of the Chapter 13 plan? The exact type of modification that the court might agree to make will depend on the circumstances of the case, but types of modifications that can be made include, for example:
- Extension of the length of the repayment plan, resulting in a lowering of monthly payment amounts;
- Reduction of the length of the repayment plan, resulting in an increase of monthly payment amounts (this modification would typically occur in a modification requested by the trustee or a creditor);
- Change in the amount of payments to certain creditors; or
- Change in the total payments to a particular class of creditors.
Contact Our West Palm Beach Bankruptcy Lawyers Today
For any individual or sole proprietor who is currently in the midst of a Chapter 13 repayment plan and needs to find out about a modification, it is important to seek advice from an experienced West Palm Beach bankruptcy lawyer at Kelley, Kaplan & Eller, PLLC. An advocate at our firm can answer questions you have about Chapter 13 modifications, and we can assist you with your motion to modify a confirmed Chapter 13 plan. To find out more about how our firm can help, contact us today to talk with an attorney about your situation.
Sources:
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
law.cornell.edu/uscode/text/11/1329
