In a Chapter 13 Plan, the payments to your clients secured. unsecured priority and unsecured general creditors , are based upon a few factors. Income over the prior six months, a liquidation analysis and their general net income after the household expenses are paid.
After a case has been Confirmed, meaning that it’s reached a point where the assigned Trustee is satisfied with the review of the documents. As well as being satisfied , that the proposed Chapter 13 Plan is paying your creditors what they are entitled to receive. That is based upon the proof of claims they filed and the information on your clients petition.
Then your client has finally reached the most important phase in their Chapter 13 case, receiving that wonderful signed Confirmation Order. The client exhales a sigh of relief knowing that all the hurdles have been passed. The attorney feels relief, that they can finally put, at what times could be, that stressful file to the side and now it’s all up to the client to continue to maintain the Chapter 13 plan payments.
A year goes by, the attorney starts to receive notices from this particular case such as a Notice of Mortgage Payment Change or a Motion to Dismiss for failure to maintain the Chapter 13 Plan payments. In some districts, the Trustee automatically modifies the Plan when it’s a mortgage payment change, in others they are not that lucky.
When it’s a default in the clients Chapter 13 Plan payments, what follows is a call or email from the client explaining the circumstances in their decline in finances, but they want to stay in bankruptcy. Now you are hit with that dreaded task of modifying the plan, when applicable.
Modifying a Chapter 13 Plan is not as easy for some in comparison to when putting together the original Plan. You have to take into account, payments made into the Plan, time remaining in the Plan, disbursements made by the Trustee and of course payment changes to the regular monthly mortgage payment.
Some days when that occurs, some attorneys or their paralegals immediately know “This right here, just changed my whole day.” The calculations can be time consuming and I’ve seen other attorneys reaching out to other attorneys hoping they could help them out with it.
Outsourced Paralegal Services, LLC fortunately provides the service of modifying a Chapter 13 Plan at a reasonable price. So when you are at task to modify the Chapter 13 Plan, and before you have that occasional conversation with yourself asking “Why did I become a bankruptcy attorney?”
Contact us for help in the modification of the Chapter 13 Plan just like your clients reached out to you before they decided to give up on their home.