Declaring Chapter 13 bankruptcy is the process by which an individual compiles all debt owed, along with income and assets, in order to establish a repayment plan to pay back what he can afford over a period of 3-5 years. During this period you make payments to the bankruptcy trustee. Obviously, a lot can happen over the course of five years. Unanticipated life changes such as a sudden illness, loss of job, or unexpected auto repair bills can upend a Chapter 13 bankruptcy repayment plan fairly quickly. Luckily, the US Bankruptcy Code foresaw unexpected life changes and set up procedures on how to deal with them during the course of the Chapter 13 repayment period.
Contact Your Chapter 13 Bankruptcy Attorney
Hiring a Citrus Heights bankruptcy lawyer can not only vastly increase your chances of having your Chapter 13 bankruptcy case approved but can also guide you through the process of requesting a chapter 13 bankruptcy repayment modification. Your first call when something comes up that will prevent you from making the entire Chapter 13 repayment amount should be to your bankruptcy attorney. Your attorney can file a motion with the bankruptcy court to explain how your circumstances have changed and request a modification of your Chapter repayment plan after it has been confirmed. If the changes have occurred before your Chapter 13 plan has been confirmed, your bankruptcy attorney can help you with filing an amended plan in the bankruptcy court.
Limitations of a Chapter 13 Plan Modification
Priority debts such as taxes, alimony, and child support must be paid during your chapter 13 bankruptcy repayment. Some debtors may run into trouble when attempting to modify their Chapter 13 payments if the plan payment amount is just barely sufficient to pay off required debts. Alternatively, if your plan is heavy on nonpriority unsecured debts then there more room to reduce the plan payment to accommodate hardship periods that the debtor might be dealing with in their lives. Modifications to your Chapter 13 plan don't always work if you can't complete your entire repayment plan. If this becomes obvious, then you have the options to convert your case to a Chapter 7 bankruptcy or to request a hardship discharge which, if approved, will allow your debts to be discharged and the Chapter 13 payments to end.
Chapter 13 Modifications
Discussing your options early on with your bankruptcy attorney when life throws unexpected events your way is an absolutely necessity. If you fall behind on any unsecured debt payments or your Chapter 13 repayment, the bankruptcy court will make a motion to dismiss your case. Dismissal of your Chapter 13 bankruptcy case will result in no discharge of debt and a loss of the administrative and legal fees already paid. If you're considering filing for Chapter 13 bankruptcy, contact your local Bankruptcy attorney to find out if it's the best form of debt relief and what you'll need to begin the process.