Help! I Filed For Chapter 13 Bankruptcy and Now My Income Has Decreased
You’ve filed for Chapter 13 and been approved and everything is going along fine until you suddenly have a loss of income...
You’ve filed for Chapter 13 and been approved and everything is going along fine until you suddenly have a loss of income. What happens now? What if you can’t meet the minimum required payments to your creditors? Do not worry, there are options available and you can work those out with your attorney. Although your Chapter 13 plan is written for three to five years in the future there are options available.
If your income has decreased and you still have enough income to pay your creditors, often times your plan can be rewritten to decrease your monthly payments. You would need to file a motion in court and if the change in your income is significant, but your expenses can still be paid, you can then file a plan modification with the court in which you can be assigned new monthly payments.
If you have lost most or all of your income, you can convert your Chapter 13 bankruptcy to Chapter 7. If it is determined that you can no longer pay your monthly payments due to the loss of income, your case will be reviewed, based on documentation of your new lowered income and current expenses and will then be converted to a Chapter 7 bankruptcy.