In my last post I addressed some of the factors that can result in your Chapter 13 Plan payments being increased after the confirmation of your plan and without your consent.
But what happens if your financial situation changes for the worse and you are making less money but do not want to give up on the Chapter 13 bankruptcy altogether?
The Bankruptcy Code permits a debtor to modify the Chapter 13 Plan after its confirmation to lower the plan payments (or to raise the plan payments for that matter) as long as the requirements of a Chapter 13 Plan are still met.
In addition to reducing the monthly payments made in a plan to an amount that is affordable to the debtor, the plan can also be modified by extending the length of the plan.
As an example, assume that you are in a 36 month plan and have tried but are unable to continue to make payments on the arrearages on your house, but you would be able to stay current on your payments if you could reduce the monthly arreage payments.
You could accomplish this by modifying the plan to extend the plan term to as much as sixty months which would allow the monthly arreage payment to be reduced.
Before you give up on your Chapter 13 Bankruptcy because you don’t think you can keep up on the payments, speak with an attorney about your options.