Chapter 13 Bankruptcy: Can I File a New Plan?

Chapter 13 bankruptcy is one of several options available to debtors seeking financial relief. Often, payments on a house mortgage, boat, or vehicle are behind and the debtor chooses Chapter 13 to consolidate these arrearages along with other debt into a petition and debt repayment plan with the Court.

Once a plan is filed with the Court, the debtor must make monthly payments to the Chapter 13 Trustee throughout the length of the plan. Occasionally, debtors’ circumstances change and they are unable to make plan payments. This dilemma may be resolved by filing an amended plan with the Court.

An amended plan requires “changed circumstances.” Courts have wrestled with how to define this term but have universally agreed that the debtor’s financial condition must have substantially and unanticipatedly changed.

What this means is that a simple reduction in income may not meet the requirement to file an amended Chapter 13 plan with the Court. The debtor’s financial circumstances must be analyzed and contrasted with those existing at the time of the filing of the original plan.

If you are debtor in need of an analysis of your finances or budget and think bankruptcy may be an option for you, contact the attorneys at Winslow & McCurry at 804-423-1382.