Modifying Your Bankruptcy Plan

While you are in the process of a Chapter 13 bankruptcy plan, problems may arise. It can be difficult living with such a strict budget for three to five years. After your plan is confirmed with the court, a trustee, you, or your unsecured creditors who filed a claim may ask permission of the court to modify the plan.

There are a few situations that are most common when someone is asking to modify your Chapter 13 bankruptcy plan.

Missed Payments

If you miss a payment to the trustee, you should expect a phone call. If it is a simple solution like getting lost in the mail or your boss forgot to send the deduction from your paycheck, there will be no problem. If however, you are struggling to make the payments, the trustee may suggest you increase the payments to cover payments that you missed or skip a few payments if you have been paying on your plan for years.

If it appears the problem will continue, and you are unable to make the payments, the trustee may ask that your case be dismissed and require you to convert to a Chapter 7 bankruptcy.

Disposable Income Changes

If your income goes down due to job loss or reduced work hours, you or your spouse suffer a serious illness, or you incurred a significant expense, let your trustee know. The trustee is likely to suggest you skip payments for a month or two, or modify your plan to make a lump sum payment when your income goes back up, extend your plan or decrease the amount certain creditors will receive.

You Incur new Debt

If you need to replace your car or you need to buy health insurance. In these cases, you can file a motion to have these new expenses included in your plan. If the car is a necessity and not a luxury, your plan will probably be approved by the court.

If you are considering bankruptcy and need help with understanding the laws, contact a Fort Worth bankruptcy lawyer to help you get the financial relief you deserve.