Payment plan decrease??

[magyar123]

Will a Chapter 13 repayment plan amount be decreased if a person becomes partially unemployed (decrease in scheduled hours) or will the Chapter 13 become a Chapter 7?

[Flamingo]

Will a Chapter 13 repayment plan amount be decreased if a person becomes partially unemployed (decrease in scheduled hours) or will the Chapter 13 become a Chapter 7?

A Plan can be modified if there is an increase or decrease in income - it depends on the amount of the increase/decrease and other factors. The best thing to do is to contact one's attorney immediately if there is a decrease in hours or a job loss resulting in loss of income so appropriate steps can be taken to avoid dismissal. The last thing one wants to do is not make Plan payments and have the Plan dismissed.

[lrprn]

Will a Chapter 13 repayment plan amount be decreased if a person becomes partially unemployed (decrease in scheduled hours) or will the Chapter 13 become a Chapter 7?

Flamingo is right - the Ch 13 plan can be modified if necessary due to a long-term decrease in income. Short-term decreases are better handled by having your lawyer discuss options with your trustee to see if payments can be deferred or reduced for a specified period.

Whether the 13 filer can convert to Ch 7 or not depends on whether the long-term income decrease is sufficient to drop them below the median income for their state and family size or creates insufficient disposable income to continue to support a Ch 13 plan going forward.