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    Losing job, 2 months severance

    Hello. I am in Chapter 13 and just lost my job. I am receiving $6000 net lump sum severance based on two months work. I lack 12 months being discharged. I will receive $170 week net unemployment. I currently pay $872.00. I contacted my attorney and he indicated they would motion the court for a smaller payment. My question is how will the reduced payment be calculated with the unemployment and severance? Is it 6 mths income going forward? Thank you. My attorney has failed to call me back for two weeks.

    #2
    Sorry to hear about your job loss. Hopefully you will be able to find a new one and better paying.

    I can't address what is legally right or wrong but I retired while in my 13 with about 1 1/2 years to go before discharge and received a lump sum payment of accrued vacation time which totaled about $9K. I figured since I was not going to make nearly the amount of money yearly, even with the added lump sum payment, what's the point in getting the trustee involved. As long as I could make the monthly plan payments and my yearly gross pay did not exceed the amount at which we initially filed, far be it from me to "rock the boat".
    Last edited by BNKRPTinNC; 08-06-2014, 11:08 AM.
    Filed 11/10/08

    Discharged 2/18/14

    Comment


      #3
      Thank you for the reply. It would be ideal if I could continue to make the payment at that amount but unemployment will barely cover my mortgage and I now have to pay Cobra Insurance which is over $500 a month. The severance I might be able to stretch from 2 months to 4 so I really have limited choice on a payment reduction. I'm really frustrated because I have worked hard as we all have to pay this in full. I am sending out resumes as fast as I can.

      Comment


        #4
        You should call your attorney and leave a message. I would call once a day until I reach the attorney. (Even though things move a little slow in bankruptcy, you still need to get this done.)

        I would also follow my attorney's advice on this. Chapter 13 plans and how to modify a plan is very specific to the individual debtor's circumstances combined with local customs and rules. Don't worry about how the new payment will be calculated. Just wait for the new payment value to be calculated. If it is less than the original, be happy. If it is more than the original, then you can talk more with your attorney.

        Do you recall whether you needed the Chapter 13 to save property, or because you were over the median?
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #5
          Thanks for replying. I filed Chapter 13 because my wages were over the median. My concern is I've made it the past 4 years just barely but with this job loss I have no clue. I'm 12 months out and this happens, its just another overwhelming time but I will get thru it. I appreciate your advice.

          Comment


            #6
            If you lost income, you should not just "struggle" to stay in plan. You should always contact your Chapter 13 attorney and see what should be done. There are options other than struggling. The only time I would lean towards struggling is where a Chapter 13 debtor was trying to save Real Property (a home) or is depending on a lien strip.

            There are things that can be done if you're not in a 0% plan. It is possible to have the plan payments lowered and you could even go into a forbearance for a month or two while deciding whether to convert to a Chapter 7.
            Last edited by justbroke; 08-07-2014, 12:50 PM.
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog

            Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

            Comment


              #7
              Thank you so much, this has made me feel much better. I heard that if creditors had been paid as much as they would have under a Chapter 7 that Chapter 7 wasn't an option with having just 12 months to go. Its all unsecured debt. I will keep following up with the attorney office like you said too.

              Comment


                #8
                I don't really understand your mentioning the Chapter 7 Liquidation Test. That test is solely a requirement in a Chapter 13 where a Chapter 13 debtor is not in a 100% plan and they are required to pay unsecured creditors at least as much as they would have received if the debtor filed a Chapter 7. If you convert to a Chapter 7, your estate does not change. It is still the Chapter 13 estate and you would still be subject to "liquidation". However, if your Chapter 13 has already paid unsecured creditors as much as they would have received had it been a Chapter 7, this test is done and over with!

                Besides, even if you did convert, and there was "non-exempt" value that was not paid in the Chapter 13, you could just surrender that property, just as you could in a straight Chapter 7.

                Again, speak with your attorney. And, don't believe everything you read on the Internet.
                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                Status: (Auto) Discharged and Closed! 5/10
                Visit My BKForum Blog: justbroke's Blog

                Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                Comment


                  #9
                  Thank you so much, this has made me feel much better. I heard that if creditors had been paid as much as they would have under a Chapter 7 that Chapter 7 wasn't an option with having just 12 months to go. Its all unsecured debt. I will keep following up with the attorney office like you said too.

                  Comment


                    #10
                    You are right about the confusion because I have no idea how bankruptcy process works. I should know more having been in it 4 years. I will just keep contacting attorney office. If they will answer my original post I might stop stressing.

                    Comment


                      #11
                      HI Just a few comments few someone who is currently in the same boat. I was 48 months into my 60 month plan when I lost my job- I immediately contacted my atty who refiled my plan with trustee. My payment was reduced from $1600.00 per month to $55.00 per month which I believe is bare minimum. Once I am settled into a new job (which G-D willing will be soon) my atty will refile with new salary, taxes, insurance etc.
                      As JB said.. call your atty and if they don't respond keep calling or go to their office.
                      It will all be ok.
                      Filed 7/17/10 1st 341 8/17/10 2nd 341 9/16/10 1st confirmation 10/06/10 2nd confirmation 11/10/10 Bar Date 11/15/10 3rd and final confirmation hearing Dec 8 and acceptance of plan Dec 29 2010....

                      Comment


                        #12
                        Wanted to post a quick update. The attorney did call and they will be reducing the payment to one that I can afford. Thank you all for the support that was much needed.

                        Comment


                          #13
                          I am very pleased to learn that you worked with your attorney to lower your payment. I only wish that other Chapter 13 debtors would seek help immediately upon having a financial setback. A Chapter 13 is not intended to be punitive by any means.
                          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                          Status: (Auto) Discharged and Closed! 5/10
                          Visit My BKForum Blog: justbroke's Blog

                          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                          Comment

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