A repayment plan is the defining step for Chapter 13 bankruptcy proceedings. Essentially, this court-approved plan coordinates how you must pay back your outstanding creditors within the next three to five years. Understandably, and rather likely, the plan you signed off on at the start of your bankruptcy proceedings may no longer work for you in subsequent years. This is when you may have to petition the New York State bankruptcy court to grant you a modification. Continue reading to learn whether you can modify your repayment plan and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you explore all viable options.
How can I effectively modify my Chapter 13 repayment plan?
You must understand that you may be expected to execute your Chapter 13 repayment plan and begin making monthly payments to your outstanding creditors within 30 days of your filing date. This is regardless of whether the New York State bankruptcy court has yet to sign off on your proposed plan. Therefore, this is to say that you may effectively modify your plan before or after the court approves it.
Of note, it may take two months to one year for the court to confirm your proposed plan. So, if your financial circumstances change during this time, you may file an amended plan. The court may ultimately sign off on this amended plan so long as your bankruptcy trustee and creditors are on board, as well.
On the other hand, if you are months or even years into your authorized plan, you may make a motion to the court to modify your expected monthly payment amount. With this, you may have to prove why you can no longer afford to follow your currently-standing plan. If you can successfully argue this, the court may ultimately grant a modified plan for the remaining duration of your bankruptcy case.
What are my other options besides modification?
You may conclude that the negative change in your financial circumstances is permanent. Or, even if this is a temporary change, you may find that you are too far into your Chapter 13 repayment plan to make up for all your missed payments. In either scenario, petitioning for a modification may not be effective or practical.
Rather, it may be more beneficial to petition for a Chapter 13 hardship discharge. With this, you may be able to eliminate your immediate financial responsibility for paying off certain unsecured debts in your monthly payments. But if your financial situation is dire, you may sooner convert your Chapter 13 bankruptcy case into a Chapter 7 bankruptcy case.
In conclusion, before it is too late, you must retain the services of a skilled Rockland County bankruptcy attorney. Contact The Law Offices of Allen A. Kolber, Esq. today.
