Consult with a Bankruptcy Attorney

• Whenever a debtor knows that he will be unable to make the Chapter 13 plan payments, he should notify his bankruptcy attorney. The Chapter 13 plan is set up so that all of the debtor's monthly disposable income is given to the bankruptcy trustee. The bankruptcy trustee is responsible for distributing those monthly payments to the creditors. If the trustee doesn't receive the payment from the debtor, the creditors don't get paid and the trustee may request the court dismiss the case. Once the debtor informs the attorney of his situation, the attorney will advise the debtor of the possible ways to modify the plan.
  
  

Provide Necessary Documentation

• The debtor should provide any documentation the bankruptcy attorney needs to verify the change in financial circumstances. For example, if a pay cut or a pay raise was received at work, give the attorney copies of the most recent pay stubs. If the debtor needs to pay for expensive car repairs that will prevent him from making the plan payment, the attorney may request a copy of the mechanic's invoice. Being able to review the necessary documentation will help the attorney make the accurate changes needed when he creates a new payment plan for the debtor.
  
  

Change Terms of Plan

• There are various changes an attorney can make to a Chapter 13 plan to make the payments more feasible for the debtor. When the debtor is having difficulty making the plan payments, the attorney can increase the length of the case. If the debtor has a three-year payment plan, the attorney can stretch out the payments for another year. Increasing the duration of the plan will decrease the monthly payment amount. If there is a temporary financial setback, the payments can be lowered for a few months and then slightly increased for the rest of the plan. The type of modification that is best suited for the debtor depends on the facts of each case.
  
  

Court Approval

• The bankruptcy court must approve the plan modification. The procedure for modifying the Chapter 13 plan can vary according to the district. The local court rules may require the debtor or the debtor's attorney to file a motion to modify the plan and set a hearing date with the court. If the modified plan will not affect any creditors' interests, no objections are raised and the trustee approves of the change, then a hearing date may not be needed. The debtor should remain in contact with the attorney to confirm the status of the plan modification in the bankruptcy case.