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Amending a Chapter 13 plan after confirmation

Florida debtors who have filed for Chapter 13 bankruptcy may not be able to amend their plan after its confirmation unless they can demonstrate that their financial situation has significantly and unexpectedly changed. A North Carolina bankruptcy court ruled that a couple could not surrender their car to the lender after they had filed for Chapter 13.

With a Chapter 13 bankruptcy, people can keep their assets as they pay off their obligations over a period of from three to five years. In this case, the couple bought the car five months before filing for bankruptcy. The car was 15 years old and had over 144,000 miles on it. Shortly after their bankruptcy filing was confirmed, they discovered that the car could not pass state inspection and was therefore inoperable. Fixing it would cost more than $1,000. Therefore, they attempted to surrender the car and eliminate the monthly amount that was to be paid to the auto lender.

The court ruled that in view of the car’s age and mileage and the fact that one person in the couple was an automobile service professional, the couple could have anticipated that there might be problems with the vehicle. Furthermore, the court ruled that although the $1,000 would be difficult for the couple to pay for, it still did not constitute a significant change in their financial situation.

Filing for bankruptcy does not mean losing everything or being unable to secure credit again although individuals doing so may want to work with an lawyer. Bankruptcy paperwork can be complex and requires precision. Careful planning during the process of filing for bankruptcy might help prevent a situation occurring like the one this couple found themselves in. Chapter 13 may be particularly important for people who want to keep their home. After filing, creditors are required to cease any harassment, and people can begin rebuilding their credit.

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