Convert 13 to 7- Deliberate Reduction in Income

[jpdude]

First, thanks to all in the forum who helped me through my 13 process about 10months ago. I am in a Chapter 13, no assets, 140K in unsecured, 11K in secured (IRS), $900 pmt for 60 mos, gross income of $120K/yr.

I have made all of my payments on time, and have managed to adjust my lifestyle such that i am surviving (gotta love Raisin Bran for dinner and buying kid's clothes off of Ebay)

I work in a very high stress job with very long and odd hours, and have been seeing a psychiatrist for about a year. Diagnosis of "Bi-polar 2" (which was major contributor to my compulsive spending), with very low lows. With the high anxiety job I have not been sleeping, am super-depressed, and my parenting (I am a single dad with 100% custody of a 12-yr old) has become horrible as I can barely attend to myself. Highly medicated--mood stabilizers, anti-depressants, lately Lunestra to help me sleep.

Psychiatrist has repeatedly recommended, to the point of insisting, that I change jobs to one less stressful, with a likely significant drop in income associated.

Question: Since I may be dropping my income "DELIBERATELY" by $20k, and will then have no disposable income, will the Trustee allow for a 13-to-7 conversion? All unsecured and attorney will have been paid off.

Thanks to all and sorry for the long post--this question has been asked a number of times on the forum but as you know, we all have unique circumstances.

[BnkrptcyLwyr]

I see no problem in taking a deliberate loss of income (in fact, I counsel my clients to do so if they can). Why work more than 40 hours a week if you don't have to and if the extra income would mean that you would pay back more in a Chapter 13? I've had a wife quit her job simply because hubby made more than enough on his own, and every penny she would earn would just be extra income to pay back her creditors.

True story ... hubby was working A LOT of overtime just to make his mortgage payments. At his rate of pay, the overtime was pushing him into a 13. I showed that he could make it just on 40 hours easy, and advised him to dump his expensive mortgage payment, and to start looking for another home. He had young children he couldn't see because he was working so much, and he was missing out on their life. "Why work for your creditors?" I told him. Cut back on the hours for six months ... and I can get you into a 7. They went home, thought about it, and decided to do it. A few more months and we'll be filing. They'll get rid of their $1,400/month mortgage, get a house payment of more like $500-600 (here in Michigan, there are a lot of steals ... er, deals). He'll be able to work a straight 40 and have PLENTY of money. He'll get to see his kids, life will be good. They're very happy with that advice.

A voluntary reduction in income can be very legitimate. Talk to your attorney and run the numbers.

Also, get the recommendation of your psychologist in writing ... never hurts.