Bankruptcy repayment plans are formulated around a debtor’s financial circumstances at the time the plan is adopted. When those circumstances change, the debtor might find themselves unable to make regular monthly payments, leading to default and a failure of the Chapter 13 process.
Rather than defaulting, debtors should consider modifying a Chapter 13 repayment plan in Fort Worth. Chapter 13 bankruptcy attorney Reed Allmand, who is double board-certified in consumer bankruptcy law by the American Board of Certification and the Texas Board of Legal Specialization, has the knowledge and experience you need to get a modification request approved for your case.
How Do You Make a Repayment Plan Modification Request?
The first step to modify a Chapter 13 bankruptcy repayment plan is to prepare and file a motion to modify your plan in the Fort Worth bankruptcy court that heard your original petition. You will need to provide a detailed explanation and supporting documentation to support your motion. The most common reasons for requesting a modification include:
- You lost your job, and you no longer have a regular, steady income that you relied on for making payments under your plan
- You or a family member suffered a serious illness or injury, and you have substantial medical bills and expenses
- The size of your household increased, for example, because you have a new baby or an elderly parent moved in with you
- You want to sell or forfeit your car, house, or other property that secured some of the debt that is part of your payment plan.
An attorney can help you file the modification correctly so your plan reflects your current financial situation.
When Should You Make a Repayment Plan Modification Request?
A Fort Worth bankruptcy court will entertain a Chapter 13 bankruptcy payment plan modification motion at any time between its confirmation of your plan until you make the final required payment. You need to act quickly, however, because you will be in technical default of your plan as soon as you miss a single payment.
The bankruptcy trustee assigned to your case can and likely will file a motion to dismiss your case 30 to 60 days after that missed payment. If the court grants the dismissal motion, you will then owe the full amount of all debts that you incurred, and you will lose the automatic stay and other protections against debt collection attempts.
Rather than take this risk, a better strategy is to promptly contact a lawyer, like Reed Allmand, who can quickly assess your changed circumstances and file a well-structured modification motion on your behalf. A bankruptcy court will be more receptive to these motions if you are proactive and you make your request as soon as you sense that you will have a problem adhering to the payment obligations in your original plan.
What Else Should You Know About Repayment Modifications?
The court will not grant your motion to modify your Chapter 13 repayment plan if you ask a Fort Worth bankruptcy court to extend payments beyond 60 months. After reviewing your evidence, the court might determine that you can pay a larger monthly amount. A lawyer like Reed Allmand, who has experience with plan modifications, can draft your motion in ways that substantially reduce this risk.
If your changed circumstances are not enough to justify a modification, you may have an opportunity to convert your case to a Chapter 7 filing, or ask for a hardship discharge, which reimburses your creditors in amounts equal to what they would have received if you filed a Chapter 7 petition.
Call Our Firm to Change a Chapter 13 Bankruptcy Repayment Plan in Fort Worth
If your financial situation has changed, it is important to act quickly to adjust your Chapter 13 repayment plan. Please call attorney Reed Allmand for more information about modifying a Chapter 13 bankruptcy repayment plan in Fort Worth. We focus on helping good people in tough financial situations get a fresh start. Contact us today to learn more.
