Modifications to your Chapter 13 Bankruptcy

How Do I Modify My Chapter 13 Bankruptcy Case?

In the video above, we provide more information on the process to modify your Chapter 13 Bankruptcy case, such as:

  • Why you may need to modify
  • How you can modify your case
  • The process that you will need to go through for your modification
  • What would qualify you for a modification

If you feel that you need to modify your Chapter 13 case, contact our office today!

Transcript

Today I am going to talk about people that are in Chapter 13s that need some changes during the time of their Chapter 13. 

Generally, when you file a Chapter 13 bankruptcy, you are paying your creditors back during a 3 to 5 year period. That's a long period of time, and many times there are going to be some events that require us to modify your Chapter 13 plan. 

When You May Need a Modification

A modification is simply a change, but it does have to be approved by the court. If you've had a reduction in income, if you're having trouble putting food on the table, you may need to modify your Chapter 13 case. 

How Is a Chapter 13 Case Modified?

That would require you to come into our office, do a new budget, and determine whether we can actually modify your case. 

In some instances, we can't modify your case even if your budget goes down because a Chapter 13 is set up to pay your house, your car, and other secured items. Sometimes there is room for us to lower the payment.

Once in a while, we have a client who gets involved in a car wreck and needs the money to replace the car or get the car repaired. Generally, that's going to require a court order, so we have to go through the modification process. 

Sometimes, a client will come in and tell us they need a three-month suspension in their payments. Generally, the suspension has to be because of such items as a maternity leave or an operation where the doctor ordered you to be off work for 10 weeks. 

Process for Modifying a Chapter 13 Plan

In order to get your payment suspended or modified, you have to file a motion to modify, meet with the Chapter 13 trustee, and assuming the Chapter 13 approves the modification, it'll be approved by the court and made part of your modified Chapter 13 plan. 

Some of the other reasons that people will modify their plan is that they'll need a portion of their tax refund that normally would go to their Chapter 13 trustee. In those instances, you have to come in with a written list of exactly how you want to spend the extra refund money and you have to prove to the bankruptcy trustee and most importantly to the court that those items (even though they were previously budgeted) are needed for your ordinary and necessary survival. 

Generally, that requires us having a written list of how you want to spend that money, estimates if it's for repairs, and then we have to do an amended budget to verify that your budget hasn't changed.  

Approximately 5 weeks later, we go in front of the Chapter 13 trustee, and they'll either recommend it for approval with the judge or we might have to litigate on that issue. 

Do I Qualify for a Chapter 13 Modification?

Anytime you want to modify your plan, although it's routine, it's not guaranteed it'll happen. There might be secured items that you want to keep, such as cars, houses, etc., and that could be a problem. 

But generally, to modify your plan, you have to come in here, prepare a new budget, sign it with the attorney, give us estimates if you need certain monies that are going to be received by the Chapter 13 trustee, and then meet the trustee approximately 5 to 6 weeks after we file it to be approved. 

It will never be approved the day you need it approved. For example, if you know you are going to need a suspension, we have to go through a process. As long as you follow the rules, you can get your Chapter 13 case modified if appropriate. 

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