Filing for Chapter 13 bankruptcy offers you a chance to avoid liquidation by completing a repayment plan to pay at least some of your outstanding amounts over time. If you fear you might have trouble sticking to the plan, understand that a repayment plan is not set in stone.
It is possible to modify the plan before a court approves it. However, you could also submit an amendment to the court after approval if different events warrant it.
Changes in life circumstances
Your repayment plan is dependent on your situation as you know it. However, life may throw unexpected challenges your way. You could lose your job, get into an auto accident that wrecks your car, suffer a protracted illness, experience a temporary or even permanent disability, or go through a divorce.
Any of these situations could impair your ability to make payments. A modification of your plan may be necessary to establish a new payment schedule.
At the request of other parties
You are not the only person who may want a modification of your repayment plan. Your trustee might find fault with your plan, perhaps finding a clerical error that you can easily fix in an amendment.
However, your creditors could also lodge an objection. They might feel that your plan does not adequately pay a debt, or your plan has missed a debt or two. Sometimes just a threat to object to a plan is enough for a debtor to submit a modification so that there are no significant delays caused by legal challenges.
The flexibility of the Chapter 13 bankruptcy process allows for you to avoid a complete derailment of your repayment plan due to situations you cannot control. You could even petition the court for a hardship discharge of some of your debt if your circumstances are dire enough.
