Habib and Zalewski P.C. a Queens New York bankruptcy firm with office location in Nassau County New York, Suffolk County New York, Queens New York, Brooklyn New York, Bronx County New York and Manhattan brings you an informative article dealing with the modification of an existing bankruptcy.

Can Bankruptcy Plan Payments Be Modified?
Chapter 13 bankruptcy plan payments can be modified in certain circumstances. The debtor’s right to modify plan payments is not absolute, however. Plan modification is often considered when a confirmed bankruptcy plan threatens to fail, and change is needed for the plan’s survival.
As soon as a debtor anticipates having trouble making a monthly plan payment, it is wise to immediately bring this fact and details of the payment difficulty to the attention of counsel. Bankruptcy counsel is then able to strategize ways to save the plan from failure and to locate viable solutions. The earlier the problem is addressed, the more options are available to the debtor. It is then prudent for a debtor (or his or her counsel) to discuss plan modifications with the trustee assigned to the case. Then, if the trustee is amenable to the proposed modifications, the debtor should file a motion for leave to modify her bankruptcy plan.
Modification Requirements
Bankruptcy plan modifications are subject to certain requirements. One of the restrictions is that unsecured creditors of the debtor are not to receive less in terms of plan payments under Chapter 13 than they would otherwise receive pursuant to debtor’s original plan. A debtor must serve a motion for leave to amend the plan, along with a copy of the proposed modified plan, to the assigned case trustee, Office of the U.S. Trustee, and creditors (or their counsel), in most jurisdictions. If there are different requirements for serving the motion for leave to amend and proposed modified plan, the jurisdiction’s local rules would address and specify those requirements.
Typical modifications of chapter 13 plans occur to do one of two things:
• change the monthly plan payment amount
• change the length of the bankruptcy plan
Provisions Outlined in the Bankruptcy Code
The Bankruptcy Code contains provisions for plan modifications in four instances in 11 U.S.C. Section 1329. Those four scenarios include:
• increases or reductions in payment amounts on particular class claims included in the bankruptcy plan
• extensions or reductions in time for plan payments
• alterations of the amount of creditor distributions for those with claims included in the plan if necessary to take into account the claim’s payment outside of the plan
• reduction of payment amounts in the bankruptcy plan by the amounts spent by the debtor to purchase health insurance
Advantages of Plan Modification
Bankruptcy plan modification may be necessary in order for a debtor to maintain and realize the multiple advantages of having an active bankruptcy case, such as:
• keeping the protections of the automatic stay
• receiving a bankruptcy discharge
• receiving the complete value of attorneys’ fees paid to date by debtor