Chapter 13 of the Bankruptcy Code provides for the adjustment of an individual’s debts, when the individual has regular income, by allowing the debtor to keep property and pay debts over time (usually three to five years) pursuant to a Plan. For information on Chapter 13 generally, see this site.  In these uncertain economic times, it is not uncommon for a debtor to enter into a ‘wage earner’s plan’ which seems reasonable in light of the debtor’s income at the time the Plan is confirmed, only to later have the Plan become unworkable due to a change in circumstances such as a job loss or reduction in business revenue. In such cases, the Plan can be modified or amended (although a conversation to Chapter 7 may also be warranted).

The precise mechanism for amended or modifying the Plan, however, can vary as it is governed by local court rules.

In the Bankruptcy Court for the Eastern District of Michigan, the modification of a confirmed Plan is governed by Local Bankruptcy Rule (LBR) 3015-2(b), which states:

‘The proponent of a post-confirmation plan modification shall serve a copy of the plan modification on all parties in interest that are adversely affected by the plan modification and file a certificate of service. If the plan modification is proposed by the debtor, the debtor shall file, prior to or contemporaneously with the modified plan, all amended schedules that are necessary for approval of the plan modification. If the plan modification adversely affects any party in interest, the proponent shall attach to the plan modification the papers required under Local Rule 3015-1(b). The plan modification shall become effective when the proponent files a certification that no timely objection was filed or when the court enters an order overruling or resolving all objections.’

The modification of confirmed plans is also addressed by Federal Rule of Bankruptcy Procedure (‘FRBP’) 3015(g).

Walter Metzen

Walter Metzen is a Board Certified Specialist in Consumer Bankruptcy with over 28 years of experience. He’s represented more than 20,000 bankruptcy clients in and around Detroit where his firm is located. View his profile here.
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