Income Changes in Chapter 13

[sadie0422]

Hello. This is my first time to post here, although, I have been reading for quite some time. My husband and I filed chapter 13 and will be one year into it come this August. We initially filed a chapte 7, as we had a work out agreement with our mortgage company to catch up the back payments over a years time, but when we filed the chapter 7, the mortgage company took the plan away and we were forced to convert to a chapter 13. Things are better, but definitely tight. We have a very good lawyer who was very good about giving us a "cusion" when it came to how much we can spend on living expenses, but that cushion is getting less and less with the rising prices of everything. That is the short version of our story.

We both have secure jobs, but I am a school teacher and their will be a change in my job description which will take away some stipends I receive for some of the extra duties of my job. They will be hiring a part time individual to lighten the load on my department, which is a good thing, but I will lose about $6500 dollars a year. Can a plan be amended after you have been in it a year. That seems like a pretty hefty pay cut and will hopefully warrant an amended plan. I don't see how we could continue with our plan payments as they are with me losing that much income. I don't want to convert to a 7, as we will lose our house. Oh....we are paying our mortgage payment, past due mortgage, past due property taxes through the plan, and all other debts are at a 10 percent payback, if that helps. Interested in what others have to say. Thanks!!

[Flamingo]

Your Plan can be modified at the time your income actually drops. The event will have to take place first. However, talk to your attorney before your income drops because you will need to obtain documentation to prove the drop and also why it occurred and he can advise you accordingly.

My income dropped $6,000 a year because the company I was working for at the time we filed, filed bankruptcy due to all sorts of problems resulting from the dot.com bust in 2000/2001. One month after we filed, I was out of a job and, according to my attorney, had better find one immediately, which I was able to do but at $6,000 per year less. Beggars can't be choosers when you are under the gun. The $6,000 drop in income caused our Plan to be modified at our 341 hearing but I had to supply proof of the income drop, a copy of the hiring letter from my new employer listing my new income and proof of the loss of the job I had at the time of filing.