Changes in Circumstances While in a Chapter 13 Bankruptcy

A Chapter 13 Bankruptcy can last anywhere fromm 36 to 60 months.  Three to five years is a considerable amount of time and a lot of things can change.  There are a number of issues that may affect your bankruptcy.  Some of the most common changes that need to be addressed are:

1. Change in Income.  Over the course of your bankruptcy you may find that you change jobs, become employed when you previously were not, or get a promotion or pay raise.  Any change in income should be reported to your attorney, regardless of whether it is a pay increase or decrease.  You attorney may advise that you need to amend certain schedules and/or amend your Chapter 13 repayment plan. 

2. A need to replace a vehicle arises.  Your vehicle may break down, or perhaps it is just time to replace your current vehicle.  If possible you should speak with your attorney before a new vehicle is an absolute necessity.  The steps your attorney will need to take depend on the situation.  If you are purchasing a new vehicle outright, free and clear of loans, you may need to explain where the funds for the vehicle came from.  If you want to purchase a vehicle with a loan your attorney will need to file a motion to incur debt.  You will have to show that you can afford your plan payment and the vehicle.  A motion has to be filed with the court and you must allow at least 21 days for objections.  If there are not any objections your attorney will file an order with the court allowing the purchase of a vehicle.  If your previous vehcile was being paid through your chapter 13 repayment plan you and your attorney may need to amend your plan to reflect the changes.

3. If you become entitled to receive a lump sum of money or property.  You could become entitled to receive money for a variety of reasons, including an inheritance, proceeds from a lawsuit or settlement, cashing out a 401k.  This list is not all inclusive.  If you receive a sum of money for ANY reason you should contact your attorney.  Generally, if you receive a sum of money while in a Chapter 13 that will have to be turned over to the trustee to be distributed to your creditors.  Generally, this will be added to your plan base and may mean that you are paying off more of your creditors.

This is not an all inclusive list.  If something changes while you are in a bankruptcy you should contact your attorney.  If you have questions, or would like to schedule a consultation, please contact a St. Louis Bankruptcy Attorney Today.