Are you currently in a Chapter 13 bankruptcy repayment plan? While many Chapter 13 cases proceed smoothly through bankruptcy court and are successfully completed, some borrowers need to adjust their plan midstream due to financial changes. If you find yourself in this situation, how can you receive help from the court? Three key documents will support your petition for modification. Here's what you need to know about them.
1. Income and Expense Schedules
Schedules I and J detail your income and expenses for the bankruptcy court to analyze. If either or both of these factors have changed, the court will want to see proof of that. As always, be honest and transparent about your finances. Avoid any temptation to exaggerate expenses or underreport income. The court is on the lookout for potential abuse of the system, and doing so could jeopardize your entire case.
2. Reason for Modification
This is where you make your case as to why you should be granted your motion for modification.
Modification is not a guaranteed right, and the court approaches it with caution. The circumstances are generally out of your control and the shift in your finances cannot be voluntary. Common reasons include loss of a job or a cut in pay, health problems that impact your earning power, increased necessary expenses, or a change in family circumstances.
Crafting a compelling explanation of why the modification is warranted takes finesse and skill. The court is predisposed to denying requests, so your attitude as well as the details of your situation make all the difference.
3. Statement of Intent
Finally, does your case include any secured assets like a home or car? Many borrowers choose Chapter 13 in order to keep these assets, which may not be an option through Chapter 7. But now that you want a modification, you will need to address what you plan to do about secured debts.
If you intend to keep the asset, the court will expect to see your new plan to pay related loans in these documents. Letting it go? The court then wants to see how you will use the portion of income freed up by removing this debt.
Where Can You Learn More?
Your motion for modification is a key part of maintaining a successful bankruptcy case. Get help following the rules and drafting a case by meeting with a bankruptcy lawyer in your state today.
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