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When problems arise with a Chapter 13 repayment plan

Generally, in a Chapter 13 personal bankruptcy, a repayment plan is put in place. Once such a plan is established, it is important for the person who is in the Chapter 13 bankruptcy to know and understand the specific terms of the plan and to very closely follow them.

Now, it is possible that after a repayment plan has been set up, a change in the person’s financial situation may make it so the plan is no longer well-suited for the situation and the person is in a position where it is very difficult for them to keep making payments per the plan’s terms.

In such a situation, one thing it can be important for a person not to do is simply ignore the plan and stop following its terms. Failure to comply with the terms of a repayment plan can sometimes result in a person’s Chapter 13 bankruptcy case getting dismissed, which would cause a person to fall out of the protection of bankruptcy. This could potentially have some catastrophic financial effects.

Rather, when a person is experiencing problems regarding their repayment plan, they may want to look at what options bankruptcy law provides them. Sometimes, individuals in Chapter 13 bankruptcy are able to request that modifications be made to their repayment plan to accommodate changes that have occurred since the plan’s establishment.

Bankruptcy lawyers can help individuals who are in or considering Chapter 13 bankruptcy with questions they have regarding repayment plans and requests for modifications of such plans. 

Source: FindLaw, “What are a Debtor’s Obligations under Chapter 13?,” Accessed Feb. 23, 2015

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