Can my Chapter 13 Florida Bankruptcy Plan be Modified?
As a practicing Chapter 13 Bankruptcy attorney in Northeast Florida, this question comes quite often in consultations and in the middle of cases. The answer in almost all circumstances is yes. Chapter 13 plans can be modified if substantial changes occur since the plan's initial confirmation. When a plan is confirmed, it is based on the debtor(s) present income and expenses at that time. If the debtor has a drop in income, the plan be modified as long as secured claims are still being paid what they should be paid every month and only if it is feasible that the debtor can catch up any arrears on secured debt which does not exceed 60 months. However, the plan can work both ways.
Every year (while the debtor is in his or her Chapter 13 plan) the debtor must turn over a copy of the previous year's tax return. At that point the Trustee will be able to tell if there has been an increase in income. If so, the Trustee could request the debtor to pay more to unsecured creditors (assuming its not a 100% paid plan anyway). Remember: all disposable income is expected and required to go towards the chapter 13 plan. So, plans can be modified by both the debtor AND the Trustee. Essentially, the Trustee would file a motion or other court pleading that calls for the debtor to make higher payments. If a substantial or drastic change in income occurs, and the debtor is no longer able to maintain feasible plan payments, the case can either be dismissed for nonpayment, the debtor can modify the plan and surrender certain secured debt, or the debtors may elect to convert to a chapter 7. Please keep in mind that the debtor must still qualify under the "mean's test" and other filing requirements if this is the route chosen.
If the debtor had counsel file their case, he or she most certainly can go to him or her and ask to have the plan modified. However, most attorneys will charge an additional fee to do this. It does take time and additional resources to draft, file and follow up with modifications. The Trustee ultimately have the final say so (approval needed) to modify a plan. If the pay stubs, W2s, or forms of increased expenses or drops in income can show the change, there should not be a problem with having a plan modified. If a debtor originally qualified for a 36 month plan because the debtor's household income was under the state median income level, the debtor can increase the length of the plan to catch up certain arrears if need be. The debtor cannot exceed a time period of 60 months or 5 years from the date of filing.
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Greg Gilbert
Keith Maynard
