Chapter 13 plan modification · Beverly Hills
Changing a Chapter 13 Plan After Filing
Yes, you can change a Chapter 13 plan after filing. If your income drops or your costs rise, the court can lower your payment, and if your income rises, the trustee can ask for more. Call (310) 362-9071 as soon as your situation changes, before you miss a payment.
- You, the trustee or an unsecured creditor can ask for a change
- A change must happen before you finish your payments
- No plan can run past 5 years from the first payment due
At a glance
When a plan can be changed
A confirmed Chapter 13 plan can be modified at any time after confirmation and before you finish making payments. The rule is in 11 U.S.C. 1329.
Before the plan is confirmed, changes are simpler. (See how plans work on our Chapter 13 bankruptcy page.) You can file an amended plan. After confirmation, you file a motion to modify, and creditors and the trustee get a chance to object. The court then decides.
A modified plan must still meet the same rules as the original plan. It must be proposed in good faith. Unsecured creditors must still get at least what they would get in Chapter 7. And the plan cannot run longer than 5 years from the date your first payment was due.
Common reasons to change a plan
- Job loss or pay cut. Lower income may support a lower payment.
- Medical problems. New medical costs or time off work can make the old payment too high.
- A new car. If your car dies, you may need court permission to take a car loan, and the plan may need to adjust.
- A new family member. A larger household changes your budget.
- A raise or new job. The trustee may ask the court to raise your payment so unsecured creditors get more.
- A windfall. An inheritance, a lawsuit award or a large bonus may have to go into the plan.
- Selling or refinancing a house. This may let you pay the plan off early or change how the mortgage is handled.
The trustee can review your income during the case. If your tax returns show a big jump, expect questions. Any new plan still has to meet the rules in our guide to how a Chapter 13 plan payment is calculated.
How the process works
- Call us right away. The earlier we know, the more options you have.
- Gather proof. Pay stubs, a layoff letter, medical bills or other records show why your budget changed.
- Update your budget. We prepare new income and expense schedules.
- File the modified plan and motion. Creditors and the trustee get notice and time to respond.
- Keep paying what you can. Stopping payments while the motion is pending can lead to a motion to dismiss.
Local procedures for plan modifications are set by the Central District of California.
Other options if the plan no longer works
- A short payment break. Some trustees will agree to suspend or reduce payments for a short time and add them back later. Ask before you skip anything.
- Converting to Chapter 7. You have the right to convert to Chapter 7 at any time if you qualify. See converting Chapter 13 to Chapter 7.
- A hardship discharge. If something outside your control stops you from finishing, a hardship discharge may wipe out most remaining unsecured debt.
- Voluntary dismissal. You can ask to dismiss the case, but your debts and creditor rights come back. Read about Chapter 13 dismissal first.
What to watch for
- Waiting until you are behind. A trustee motion to dismiss may come before you can fix the plan.
- Taking on new debt without permission. A new loan during the case usually needs approval.
- Hiding a raise or windfall. You must report changes. Hiding them can cost you the discharge.
- Running out of time. A 5-year plan cannot be stretched further, so missed payments late in the case are harder to fix.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on Chapter 13 bankruptcy
- Chapter 13 bankruptcy in Beverly Hills
- Chapter 13 Eligibility and Debt Limits
- How a Chapter 13 Plan Payment Is Calculated
- Car Loan Cramdown and the 910-Day Rule
- Changing a Chapter 13 Plan After Filing
- Why Chapter 13 Cases Get Dismissed and How to Avoid It
- Chapter 13 Hardship Discharge
- The Co-Debtor Stay: Protecting a Co-Signer
- Mortgage arrears cure plan
- Second mortgage lien stripping in Chapter 13
- Converting Chapter 13 to Chapter 7
Plan modification questions
Can I lower my Chapter 13 payment?
Yes, you can ask to lower your Chapter 13 payment if your income has dropped or your necessary costs have gone up. The court must approve the change. The new plan must still meet the legal tests.
Can the trustee raise my Chapter 13 payment?
Yes, the trustee can ask the court to raise your Chapter 13 payment if your income goes up. An unsecured creditor can also ask. You get a chance to respond.
Can I extend my Chapter 13 plan?
You can extend a Chapter 13 plan only up to 5 years from your first payment due. If your plan is 3 years, there may be room to extend it to lower payments.
How long does a plan modification take?
A plan modification usually takes several weeks, because creditors get notice and time to object. Keep paying what you can while it is pending.
What if I cannot afford any plan at all?
If you cannot afford any plan at all, converting to Chapter 7 or asking for a hardship discharge may make sense. We review both with you.
Free consultation
Change your plan before you fall behind
Call (310) 362-9071 or send the form. Tell us what changed and we will review your options with you.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.