A Chapter 13 Bankruptcy repayment plan lasts between 36 and 60 months. During that period of time there are many events that may happen which may diminish or enhance one’s ability to repay their creditors under a Confirmed Chapter 13 repayment plan. Change in circumstances that are cause for a modification of a confirmed bankruptcy plan are as follows:
1. Obtaining a mortgage modification (a modification of the Chapter 13 Plan and/or court approval is usually required by the mortgagee),
2. Loss of income due to unemployment or health reasons,
3. Separation or Divorce,
4. Increase in expenses, such as health care expenses,
5. Decision to surrender an asset, such as a home or vehicle, that was included in the Chapter 13 Plan, or
6. A secured debt has been satisfied from the proceeds of a sale, such as a sale of real estate.
In order to Modify a Confirmed Bankruptcy Plan under 11 U.S.C. Section 1329 (Modification of Plan after Confirmation), a motion shall be filed in the United States Bankruptcy Court along with the Proposed Modified Chapter 13 Bankruptcy Plan. After Notice and a hearing the Bankruptcy Judge has discretion whether a modification of the Plan shall be granted. Due to the length of time of a Chapter 13 Bankruptcy Plan and the possibilities that may warrant a modification, such motions to modify are fairly common in our practice.
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