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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 174
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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This is a Chapter 13 question. The Debtors have just been

Resolved Question:

This is a Chapter 13 question. The Debtors have just been confirmed. About 2 days after confirmation, one of the debtors had to be rushed to the emergency room and it looks like they could be in the hospital for a while. There is no question that the debt(s) are post-petition. Can they include that in their bankruptcy or will they have to pay it all? How is that commonly handled / addressed. Thank you in advance for your assistance.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Elizabeth Prentice replied 3 years ago.
I am a bankruptcy attorney and I would be happy to assist you. Unfortunately, since the debt is post-petition it may not be added to their bankruptcy. Federal law prohibits post-petition debts, those incurred after the date of filing. Depending on the size of the debt, the debtor's current financial situation via the confirmed plan, the debtor may wish to consider a few different options. Even if the plan is confirmed, the debtor may file a motion to amend the plan and lower the plan payment to the trustee based on the new debt they incurred. For example - if the debtor is required to pay medical expenses, he can request a new plan include this new expense, thereby lowering his payment to the trustee. A second option, which is not as recommended, is having the debtor file a notice to close it and restart everything at square 1. He would not get a refund, since the trustee will have already sent out payments to creditors, but the debtor could refile. He should consult with a local attorney to address all the repercussions of canceling a bankruptcy case prior to receiving a discharge after confirmation. Some repercussions include repossessions, foreclosures, and loss of the bankruptcy stay if they refile.
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Customer: replied 3 years ago.
Will the Debtors have to pay all of the new expenses if they are in a plan that is not 100%?
Expert:  Elizabeth Prentice replied 3 years ago.
Without knowing every detail of the plan, all the schedules, all the claims, etc., I can not advise you with specifics. The bankruptcy attorney that got the plan confirmed should address your specific questions. If the plan is not 100%, that means that they will be getting a discharge of the debt that is not being paid in the plan. The attorney should review first whether the plan payment can be lowered. For example, if any part of the plan payment is going to unsecured's, then the plan payment can be lowered through a motion to amend the plan due to the debtor's changed circumstance of having to pay new medical debt. The plan payment can lower then to as far you can get it, so no unsecured's are being paid. I recommend the debtors contact a local attorney to review their plan and file a motion to amend the plan if possible. However, if it would be negative for the debtors to amend the plan since their plan payments can not be amended, and if they can't handle paying the medical bills too, dismissal without discharge may be their only option.
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