Can You Amend a Chapter 13 Plan?

Amendments must be made through the bankruptcy court

A Chapter 13 bankruptcy offers a creditor repayment program that is structured and enforced by the bankruptcy court. If you experience a notable change in income, you may petition the court to alter your repayment obligations.

The Facts

A Chapter 13 plan can be amended either by altering the monthly payment amounts to creditors or by converting the plan to a Chapter 7 bankruptcy.

Features

Each year that you are involved in a Chapter 13 repayment plan, you will be required to provide the bankruptcy trustee with a copy of your tax return. If your yearly taxes demonstrate a significant change in income, the bankruptcy court may amend your plan and adjust your repayment obligations.

Considerations

You can request an amendment prior to tax season by providing the bankruptcy trustee with valid evidence of a change in income and a new proposed repayment plan.

Time Frame

Any proposed amendments must still allow debts to be paid off within the three-to-five-year limit for a Chapter 13 bankruptcy.

Warning

If your income increases and you do not notify the court, you will either be forced to pay an extra amount during your yearly tax review or have your bankruptcy dismissed.

References

• Chapter 13 Bankruptcy: Keep Your Property and Repay Debts Over Time; Robin L. Leonard and Stephen Elias; 2008
• USCourts.gov: Chapter 13: Individual Debt Adjustment