11 U.S.C. Section 1193 -- Modification of Plan in Subchapter V

What Is Section 1193?

Section 1193 of Title 11 of the United States Code (Modification of Plan in Subchapter V) is a foundational provision of the Bankruptcy Code. It allows modification of a Subchapter V plan both before and after confirmation. This flexibility is critical for small businesses whose circumstances change during the repayment period.

Key Provisions of Section 1193

Section 1193 provides:

• 1193(a) -- Pre-confirmation: The debtor may modify the plan at any time before confirmation.
• 1193(b) -- Post-confirmation: The debtor, trustee, or holder of an allowed unsecured claim may request modification after confirmation and before substantial consummation.
• 1193(c) -- Post-substantial-consummation: Even after substantial consummation, the plan can be modified if the debtor cannot complete payments due to circumstances for which the debtor should not justly be held accountable.

How This Affects You

Plan modification flexibility is a safety valve:

• If the business recovers faster than projected, creditors may seek increased payments
• If the business struggles, the debtor can seek reduced payments to avoid conversion
• The 1193(c) standard for post-consummation modification is more restrictive, requiring circumstances beyond the debtor's control

Related Bankruptcy Code Sections

Section 1193 works in conjunction with several other provisions of the Bankruptcy Code:

• Section 1190 -- Original plan acceptance
• Section 1181 -- Subchapter V framework

Understanding how these sections interact is critical for anyone navigating the bankruptcy process, whether as a debtor, creditor, or attorney.