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 http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html).  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):  "A request to modify a plan pursuant to § 1229 or § 1329 of the Code shall identify the proponent and shall be filed together with the proposed modification. The clerk, or some other person as the court may direct, shall give the debtor, the trustee, and all creditors not less than 20 days notice by mail of the time fixed for filing objections and, if an objection is filed, the hearing to consider the proposed modification, unless the court orders otherwise with respect to creditors who are not affected by the proposed modification. A copy of the notice shall be transmitted to the United States trustee. A copy of the proposed modification, or a summary thereof, shall be included with the notice. If required by the court, the proponent shall furnish a sufficient number of copies of the proposed modification, or a summary thereof, to enable the clerk to include a copy with each notice. Any objection to the proposed modification shall be filed and served on the debtor, the trustee, and any other entity designated by the court, and shall be transmitted to the United States trustee. An objection to a proposed modification is governed by Rule 9014."

     Whether your change of circumstances requires modification or amendment of your Plan, or possibly a conversation to Chapter 7 (see LBR 1017-1) will be a fact-sensitive determination that will depend upon your particular circumstances, and will require consultation with a bankruptcy attorney.

-Drew Broaddus