Can I Make Changes to My Chapter 13 Bankruptcy Plan?
Chapter 13 bankruptcy is the most common type of reorganization bankruptcy for individual debtors, and it requires the debtor to have a repayment plan approved as part of their Chapter 13 case. For most individual debtors (or for a married couple filing jointly), a Chapter 13 case will involve a repayment plan that lasts from three to five years. That repayment plan will involve making regular (usually monthly) payments to the trustee so that secured and priority creditors can be repaid in full over the course of the plan, and so that unsecured, nonpriority creditors can receive some form of payment depending on the financial circumstances of the debtor.
Yet a period of three to five years is a long time, and in the course of that period, the debtor may experience changes to their circumstances. For example, the debtor might be laid off from their job or fired, or the debtor might suffer an injury or be diagnosed with a medical condition that prevents them from working. In such circumstances, it will likely become important for the debtor to find out: Can I make changes to my Chapter 13 bankruptcy plan? Modifying a Chapter 13 repayment plan may be possible, and depending on the circumstances, the debtor may even be able to convert their bankruptcy case to a Chapter 7 bankruptcy. Our West Palm Beach bankruptcy lawyers can tell you more.
Modifying a Chapter 13 Plan
Under US bankruptcy law, it may be possible to modify your Chapter 13 payment plan at different points in the bankruptcy process. If there is a need to modify the plan before the court confirms it, it is usually easier to make a modification at this stage and to amend the plan before the court confirms it. Yet even after your plan has been confirmed — even if you have been making payments for a number of years — you may be able to have the court modify your plan if you have experienced a change in circumstances.
To have your confirmed Chapter 13 plan modified following a change in circumstances, you will need to provide the court with detailed information about the change in circumstances and how it affects your financial situation. If the court believes it is necessary to modify the plan, it will do so.
Seeking a Chapter 13 Hardship Discharge
In some instances where a change of circumstances necessitates a modification to a Chapter 13 plan, it may be possible to receive what is known as a hardship discharge. In short, the court may discharge your remaining debts if your change in circumstances is likely to be permanent and if you have made enough payments as part of the plan such that your creditors have received at least the amount they would have received if you had filed for Chapter 7 bankruptcy.
Converting to Chapter 7 Bankruptcy
If a modification or hardship discharge are not feasible given the details of your case, it may be possible to convert your Chapter 13 case to a Chapter 7 bankruptcy. To do so, you will need to pass the “means test” and show your eligibility for a Chapter 7 filing.
Contact Our West Palm Beach Bankruptcy Attorneys Today
Do you have questions about modifying your Chapter 13 repayment plan or converting from a Chapter 13 to Chapter 7 bankruptcy case? Do not hesitate to reach out to an experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller. We have years of experience representing individuals and businesses in a wide range of bankruptcy matters and can speak with you today about your case. Contact us to ask any questions you have and to learn more about how we can assist you.
Source:
law.cornell.edu/uscode/text/11
