Modifying Your Chapter 13 Bankruptcy Payment Plan
Many people believe that filing for Chapter 13 Bankruptcy locks you into a specific payment plan, but this simply is not true. Though you are typically locked into a payment plan for three to five years, you can always modify the plan if you are unable to make the payments. Unfortunately, this can be a difficult process that requires the assistance of a bankruptcy attorney. If you are hoping to modify your Chapter 13 Bankruptcy payment plan, be sure to read the following advice from the attorneys at Groce & DeArmon.
Reasons to Modify Your Payment Plan
A Chapter 13 Bankruptcy case usually lasts anywhere from three to five years. During this time, your life may change dramatically and you may be forced to reconsider your payment plan. Such changes can include a job loss, a family illness, or an unexpected emergency. If these changes dramatically affect your finances, you may not be able to afford your payments at their current rate. To avoid defaulting on your payments, it is best to modify your payment plan.
How to Modify a Chapter 13 Bankruptcy Payment Plan
To modify the payments, you have to make a motion (ask the court) to change your payment plan to an amount you can afford. Afterward, the court and your bankruptcy trustee will usually ask you to explain your reason for modifying the plan and provide proof of the circumstances. For example, if you need to change your payments due to a serious illness in the family, you will need to provide proof of the illness and medical bills. If the court is satisfied with your reasoning, your payments will be modified for the remainder of your bankruptcy case.
Though the process may sound relatively simple, modifying a Chapter 13 Bankruptcy case can be a long, time-consuming process, requiring close attention to detail and loads of paperwork. To ensure you have the greatest chance of approval, it is best to work with a bankruptcy attorney.
Not every aspect of your Chapter 13 Bankruptcy payment plan can be modified. Certain taxes, priority debts, and mortgage payments must be paid at the same amount. Typically, you can only reduce nonpriority debts, such as credit cards.
Contact Groce & DeArmon
Modifying your Chapter 13 payment plan is not easy, but working with an experienced bankruptcy attorney certainly helps. At Groce & DeArmon, we specialize in Chapter 7 and Chapter 13 Bankruptcy cases. With over 25 years of experience, we can help you throughout every step of the bankruptcy process. To set up a free consultation, contact Groce & DeArmon today!