For people who are considering filing Las Vegas bankruptcy, Chapter 13 has a few benefits that Chapter 7 does not, but in many cases, people file in Chapter 13 because the Chapter 7 means test prevents them from doing so. Chapter 13, however, isn’t easy, and frequently, those who start down the 3-5-year repayment plans fail to complete them. If you’re considering Chapter 13, or you’re in the middle of a repayment plan, and you think you will run into trouble soon, the Bankruptcy Code can offer some help, so don’t worry. You can try to modify the plan. Section 1329(a) of the Bankruptcy Code specifies the ways in which you (or the trustee or a creditor) can do so:
- Increase or reduce the number of payments on calims of a particular class provided for by the plan;
- Extend or reduce the time for those payments;
- Alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim other than under the plan;
- Reduce amounts to be paid under the plan by the actual amount expended by the debtor to purchase health insurance for the debtor (and for any of the debtor’s dependents who do not have health insurance) if the debtor documents the cost of the health insurance.
Those who are running into financial difficulties can try to reduce their current payments and extend the durations of the plans. The only caveat is that § 1329(c) of the code places limits on the plan’s duration. For instance, extending the plan’s duration requires the bankruptcy court’s approval, and the court cannot approve plans that go more than five years. The point is to prevent the debtor from signing on to plans that go on indefinitely and at some point assure that he or she obtains a fresh start.
Keeping on a Chapter 13 plan can be challenging, but experienced Las Vegas bankruptcy attorneys are available to help if problems arise.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.