The Flexibility in a MN Bankruptcy Chapter 13 Payment Plan

Posted by William Kain on April 3, 2021 at 6:30 AM
William Kain

Flexibility in a MN Bankruptcy Chapter 13 Payment PlanI posted recently about the composition of a chapter 13 payment. A number of factors – not simply a budget calculation – go into determining the final payment amount. And that recent post only covered some of the considerations. Here are some more things to keep in mind in determining what a monthly chapter 13 payment will be.

In some cases, the amount that has to be paid over the lifetime of a plan – attorney fees, trustee fees, auto loan payments, mortgage arrears, tax arrears, etc. – works out to a higher monthly payment that a debtor can afford right now. Does that mean that a chapter 13 simply won’t work in this situation? Not necessarily.

How Chapter 13 Payments Can Increase or Decrease

Chapter 13 payments can increase (or decrease) as needed in order to fund the plan appropriately - a chapter 13 payment plan can be modified. Sometimes that means that we project in increase in income and/or a decrease in expenses sometime in the future of the plan that allows for a higher payment so that the minimum amount of money that the trustee has to receive is met. The projection of increases in income or decreases in expenses has to be made in good faith – there have to be facts to support the expectation that a future higher payment will be feasible.

If the debtor has an asset with equity in it, the anticipated liquidation of that asset – whether it’s a paid-for vehicle, a retirement account or life insurance with cash value - can help support an increase in monthly payments or the one-time, lump sum payment to get the plan sufficiently funded.

Sometimes, the payment will increase after a period of time even though the original payment is sufficient to fund the plan. This situation comes up when a debtor who is paying child support will see his child support obligation end, or a 401(k) loan will be paid prior to the end of the chapter 13 plan. In cases like this, the court will require that the chapter 13 payment increase in the amount of savings the debtor expects to experience.


Knowing how much money has to be paid into a plan, and which approach is the best to get a plan properly funded is often not obvious. The lawyers at Kain & Scott are experienced and knowledgeable. We can help you put together a sensible payment plan. Are you interested? Get started by visiting


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