If you struggled with crippling debt and decided to file bankruptcy, and due to your specific conditions, you opted for Chapter 13, then your and your bankruptcy lawyer filed a repayment plan. If your financial situation has changed, and even the current monthly payment is challenging¸, you need to know it can be altered.
Essentially, You can modify your plan before and after its confirmation by the court. However, depending on the case and the court, it can take anywhere from two months to over a year before the court can confirm your case and amend your plan. Your Colorado bankruptcy lawyer will always assist you in moving this process along as quickly as possible.
The main point that your lawyer and the court will consider is how your financial situation has changed after your plan’s confirmation and how significant that change might be. Always contact your bankruptcy attorney to modify the plan payment, and they will assist you in the calculations and documents necessary to file with the court. It’s vital to note any significant alteration and decrease in your ability to pay may warrant a plan modification.
Also vital to note is that time is of the essence in these cases. So, consulting with your experienced Loveland bankruptcy lawyer as soon as possible is mandatory.
Skipping any payment for your Chapter 13 plan will negatively impact your entire Chapter 13 case. If you miss a payment under the current plan, the Colorado court may dismiss your case or change your bankruptcy case to Chapter 7. This is not good as under a Chapter 7 bankruptcy; the court can liquidate your nonexempt assets to pay any or all your outstanding debts.
So, get ahead of the courts, and as soon as you are aware your finances have or will change, consult with your Loveland bankruptcy lawyer immediately. Your lawyer, and their team, will know just how to approach the problem, what to show the courts, and what to file to solve this issue before it becomes worse. Do not let it get out of hand!
What Can I Do To Lower My Repayment Plan
If your financial circumstances change after your Chapter 13 plan has been confirmed, you could request a temporary halt from making plan payments or a long-term reduction in plan payments. This process might even be the key to finishing the bankruptcy. For example, if you lose your job, are forced into a lower-paying or part-time position, or incur major, unanticipated expenses, like medical bills and moving costs, the courts may allow more drastic alterations to your overall plan.
All your options in bankruptcy court depend entirely upon your specific circumstances. You can turn the situation around within a few months, and you simply seek a temporary moratorium on plan payments. If you are dealing with a long-term change, however, but still can show “disposable income,” your lawyer could ask the bankruptcy court to allow you to modify your plan and lower your monthly payments permanently.
Repayment plan moratoriums can usually solve many issues but typically last for no longer than 90 days from making monthly payments to the Chapter 13 trustee. Most bankruptcy courts may allow a plan moratorium if you are experiencing the following:
- A short-term gap in your employment.
- A temporary injury or disability.
- Significant but unanticipated expenses that keep you from being able to make one or more plan payments.
The moratorium, however, does not change the current terms of your plan. It is designed to give you a temporary break in payments until you can bounce back from a specific short-term financial problem. Once a moratorium ends, you will start wherever you left off and resume making monthly plan payments.
Many ways and reasons would give you a valid reason for your plan to change, and your knowledgeable Colorado bankruptcy lawyer will look over your specific case and guide you in the correct and most beneficial legal direction.
What Can I Do to Modify My Plan Permanently?
For you and your bankruptcy lawyer to lower monthly payments permanently, you must prove the reason behind the request and ask the bankruptcy court to modify your plan.
Some common reasons for modifying your monthly payments permanently are:
- You were forced to take a lower-paying job.
- If you are self-employed, you might have lost key, or large volume, customers or incurred unanticipated business expenses
- You suffered significant injury or disability that now permanently interferes with your ability to work.
- You now must pay health insurance premiums for yourself and your family that your employer previously covered.
General bankruptcy law imposes the exact requirements to modify a Chapter 13 plan to confirm your plan initially. Also, any modification must conform with guidelines regarding secured debts, unsecured debts, feasibility, and more. Your Loveland bankruptcy lawyer will base all documents filed with the court on your specific financial situation. They will also know all the rules and guidelines and be with you every step of the process
If I Must, Can I Change My Chapter 13 Bankruptcy to Chapter 7?
There are instances when you may want to convert a bankruptcy case from a Chapter 13 to a Chapter 7 bankruptcy. Also, there are times when the bankruptcy court will force this conversion.
Although there are many and varied reasons to convert, you might consider a conversion when:
- Your financial circumstances have changed, and you cannot make the Chapter 13 plan payments any longer. Many valid reasons could instigate this.
- You filed for Chapter 13 bankruptcy primarily to keep property or items that aren’t wanted anymore. Examples of these things could be a former family home, expensive artwork, automobiles, etc.
In most cases, you have a legal right to convert your case for many reasons, but that doesn’t always mean you’ll qualify for Chapter 7. Your Colorado bankruptcy lawyer will detail and explain eligibility issues, as well as why the court might want to force you to convert to Chapter 7.
I Need To Modify My Repayment Plan; How Do I Proceed?
You, and your family, may already have taken a concrete legal step to rectify your financial issues by setting up a proper and well-intentioned repayment plan. Life, however, is constantly changing, and now your previous plan is financially intolerable. The Loveland bankruptcy lawyers at the Holland Law Office have a long and successful history in helping Colorado families navigate repayment plan alterations so they can move on with their life. Consult with them first, and they will explain all your legal options and stand by your side every step of the way.