Modification Of Chapter 13 Plans For Debtors In Financial Distress

I attended a meeting of local bankruptcy attorneys where the Chapter 13 Trustee spoke about current developments. She stated that the real estate recession in Florida, and job losses in many related industries is causing more and more Chapter 13 debtors to fall behind in their plan payments. The Trustee encouraged attorneys to educate Chapter 13 debtors experiencing financial difficulty about the opportunity to modify Chapter 13 plans to defer payments. When good cause is shown, the Chapter 13 Trustee will support plan modification request. The Chapter 13 Trustee also raised the possibility that bankruptcy judges may permit more lenient modifications as the Florida economy deteriorates further.

If you are a debtor in Chapter 13 who experiences a pay reduction, temporary job loss, or a family illness please contact your attorney about seeking a modification of your Chapter 13 plan prior to defaulting in plan payments. It is easier to modify a Chapter 13 plan when your payments are current than after you are months behind in your payments.

For another discussion about what to do if you fall behind in Chapter 13 payments, you may want to read this article by attorney Peter Orville. Link: What Happens In A Chapter 13 If I Get Sick Or Lose My Job And Can’t Afford To Make My Plan Payments? : Bankruptcy Law Network.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida