Sometimes the Chapter 13 plan needs a modification. Your income might drop which means you need a Chapter 13 plan modification to lower payments. Or, perhaps your mortgage company didn’t file a claim. If that’s the case, now you must file a claim for them and include that claim with a Chapter 13 plan modification. Next, you might become disabled for a month or two in which case you need a Chapter 13 plan modification to allow you a couple of months off from payments. Chapter 13 plan modifications normally only need a motion, newly completed budget, and affidavit to modify your plan.
How to Make Chapter 13 Plan Modifications or Conversions
There are a number of reasons to modify the plan. One reason is when secured creditors don’t receive enough payment. Then, the amount paid to unsecured claims might have to be lowered instead of raising payments. Interestingly, Chapter 13 is flexible in allowing some things in our district. However, it’s inflexible in others such as missed payments or a failure to turn over the tax refund.
The point to remember is that your Chapter 13 plan can be modified. Chapter 13 can also be converted in most cases if you waited 8 years after your last Chapter 7 before you filed Chapter 13. But new schedules must be submitted. If you don’t, your Chapter 13 can be dismissed and refiled as a Chapter 7 or another Chapter 13. However, that only happens if the timing and waiting periods are properly satisfied.
⎆ The advantages of Chapter 13.
There is no absolute right to dismiss a Chapter 7 but there is almost an absolute right to dismiss a Chapter 13 if you need to. This may be because you no longer need Chapter 13 after you change your mind about keeping a home. There are several reasons for filing a Chapter 13 and one is that not enough time has passed to file Chapter 7. Or, it might be because you need the protection temporarily.
You could become disabled, in which case, it takes a period of time before all of the debts come in from several surgeries in a hospital. After all, the medical debts are in and your disability has ended so, now you can convert and file Chapter 7 to discharge all of the debt. You may have to make the payments in the plan, but Chapter 13 is like a chameleon always changing to your needs for a fresh start.
Other Related Information
If you are thinking about filing bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.