How Flexible is Chapter 13 After You’ve Filed?

A big advantage to a Chapter 13 is there is a great deal of flexibility even after your case is filed, should your financial situation change.  After all, a Chapter 13 plan typically runs three to five years (closer to five in my experience) and most people experience changes in any three to five year period.

A big part of my practice is working with clients to make those changes that are necessary to make a Chapter 13 work over the long haul.

If you have a significant change in income or expenses during the course of your Chapter 13, the Court may approve a modification of your plan to account for such changes.  Sometimes that is a question of simply lowering payments.  (And in rare cases, the trustee or creditors can ask for increases, if your income has undergone a significant and unexpected change.)

Sometimes changes may be necessary because you find that even with restructuring your debt you still can’t afford your mortgage payment. Or you may decide that you don’t need that vehicle that once seemed essential to your family.  Or you may be able to finally get your mortgage modified or refinanced.  Those are only a few examples–the circumstances that could lead to plan modification are as varied as life itself.  Or, if you just have a short term problem, the court may grant a moratorium in payments, just to allow you to weather an illness, one-time expense, or some other temporary cash flow problem.

Obviously, you want someone on your side who will help you through the issues that will inevitably arise over a period of years.  When you are talking with a lawyer about the possibility of filing a Chapter 13 case, be sure you discuss the potential for changes to your plan after the case is filed, and be sure you understand how the fees for such additional work will be handled.