You probably hope that filing for Chapter 13 bankruptcy is the first step on your journey to fiscal solvency. Like any journey, there are bound to have turns along the way, and your repayment plan will probably not be an exception. Even after you have come up with your plan to pay off your creditors, there may be reasons for you or another party to want to change it.
Chapter 13 bankruptcy is versatile enough to accommodate changes. In fact, sometimes a change may be necessary for you to complete your repayment plan and exit bankruptcy. Here is a look at some situations in which you may have to change your plan.
To win judicial approval
After drafting your plan, you hope that your bankruptcy judge will give it final approval. However, as the U.S. Courts website explains, sometimes a judge will reject a plan. Fortunately, this is not the end of the process. Once you have learned why the judge had denied your plan, you may consult with your trustee to draft a second plan that your judge might accept.
At the request of a creditor
Keep in mind that your creditors will have a say in how you repay them. Ideally, your plan will address their concerns and treat them in what they believe is a fair manner. Still, it is possible that an unsecured creditor will initiate a request to change your plan. Sometimes the reason is just clerical, perhaps because the plan did not list one or more creditors. These are issues that should require a simple modification.
To deal with changing circumstances
An unexpected situation may hinder your ability to make your payments, like losing your job or a car accident that disables you for a period of time. You may consult with your trustee to figure out a course of action. Sometimes a trustee allows you to make up a missed payment, but if warranted, your trustee might seek a change in your plan to give you more time to pay off your debts.
The possibility of modifying your plan when needed hopefully will encourage you as you seek to reclaim your financial freedom. Even if your current situation takes an unexpected turn, the flexibility offered by Chapter 13 bankruptcy should provide you with some options.