What happens after a Chapter 13 petition ?
After a chapter 13 petition has been accepted in the court, the court approves of a 3 year or 5 year repayment plan. The trustee appointed by the US bankruptcy court oversees the plan.
The chapter 13 repayment plan is made with its own set of assumptions, like steady income over 5 years, no wage loss, no liability through accidents, no major health issue etc. Sometimes these assumptions are proved false, and the debtor struggles to meet the obligations of the repayment plan. In this scenario, the debtor may directly meet the trustee to modify the plan or he may contact his attorney, who then arranges to meet the trustee and modify the plan. In a worst case scenario, a chapter 13 can be converted into a chapter 7 liquidation.
In case. the debtor falls short of his repayment, the trustee can file a motion to dismiss the chapter 13 petition. As a response to this the debtor’s attorney usually needs to file a motion to modify the plan.
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