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Can my Chapter 13 Plan Payment be Increased After the Plan is Confirmed

Changes In Disposable Income

The answer to this question is "yes," your Chapter 13 Plan payment can be increased after the Plan is confirmed. When you file a Chapter 13 bankruptcy case, your wages and all other income are under the jurisdiction of the United States Bankruptcy Court. When your Chapter 13 case is filed, an Estate is opened up which consists of all of the Debtor's property, including wages and income. An increase in income during the administration of the Chapter 13 case can create a situation where there is more disposable income available to pay general unsecured creditors. If the Chapter 13 Trustee, or in rare instances a creditor, files a motion to increase the plan payment with the Court based upon an increase in debtor income, then in that instance the Debtor will have to consider preparing and filing an Amended Schedule I and J to show any new expenses and deductions from wages that correspond to the higher income.

New Property Received by the Debtor

In addition to a change in income after confirmation of the Plan, the debtor may receive new property during the administration of the Chapter 13 case. An inheritance of money, lottery winnings, sale of a home, car or other asset ( with the required Court approval) can result in more money being available post-confirmation to pay more to creditors.

Review Schedules I and J

The key to any increase in income or property after your Chapter 13 Plan is filed is to contact your bankruptcy attorney to make the necessary adjustments to your household budget on Schedules I and J. In many Chapter 13 cases the household expenses are kept to a bare minimum to show that the Debtor has enough funds to make the lowest possible Chapter 13 Plan payment permitted under the circumstances. In these cases, the general unsecured creditors initially receive just a small percentage of what they are owed. When the debtor later receives an increase in income, or new property into the Estate, then the new monies need to be applied to necessary household expenses that have arisen. An increase in household expenses can be the result of higher insurance costs, post-filing income tax bills, post-filing medical bills, post-filing attorney fees, a higher amount owed to a creditor based upon a post-filing and timely filed Proof of Claim, etc.

If you have questions about whether your Chapter 13 Plan payment can or will be increased, or general questions about Chapter 13 bankruptcy... Call me. I'll BE there for you.