Chapter 13 debtors are required to submit a repayment plan that must be approved by the bankruptcy court. The plan sets forth how you intend to treat your creditors in your bankruptcy case. The Chapter 13 plan is for a period of three to five years. This amount of time means that even with planning every aspect of your repayment plan, you can still encounter changes in life circumstances and other problems. For example, what happens if you are in the middle of your Chapter 13 case and you lose your job or encounter a major medical issue? When unexpected events occur that negatively impact your disposable income, you have two options:
- Amend the Chapter 13 plan. A debtor can request permission to amend the Chapter 13 plan. You will need to prove that a modification of the plan is necessary. It is possible creditors will challenge the modification, so your attorney must be prepared to handle any challenges. It is important to provide your lawyer with any documentation you have that evidences a change in your finances and that modifying the plan is necessary. The most common ways to modify a Chapter 13 plan are to alter the amount of your monthly payment or extend the term of your plan.
- Convert to a Chapter 7. If you are struggling in your Chapter 13 case, you may be able to convert your case to a Chapter 7.
If you are interested in filing a bankruptcy case or you need assistance with a struggling Chapter 13 case, you need an experienced attorney at Levitt & Slafkes to assist you. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..