Plan adjustment commensurate with change in income

[AZBK13]

There are a couple of changes coming up (one is a sure thing and one is a very real possibility) that will both change my actual income and my "disposable" income.

1. There is a very real possibility that my income will decrease in the forseeable future, probably this year.
2. Next year I will need to move. It is very likely that my rent will increase by $200-$400 dollars.

I am in the second year of an approved chapter 13 plan. Speaking hypothetically, if my plan payment is $800 a month, and my income drops $500 a month, and my rent increases $300 a month, the decrease in income would zero out my plan payment. But... I would still be above the standard threshold for a family of five to qualify for chapter 7.

Doe any of you have any experience with a situation like this?

Just to make sure it's clear I'll break it down:

$800 plan payment
-$500 income decrease
-$300 rent increase
=$0

But income is still above the threshold for chapter 7.

Thanks.

[Guest123]

I don't think it is exactly that simple. It would depend on your case.
There are alot of factors to determin.
Just because you can't afford the ch13 payments does not mean you can file ch7.

And again depending on your case you could possible be over the median and still file ch7.

[IamOld]

RIght - the payment may also hinge on whether you're paying any secured creditor arrears (mortgage) and/or priority unsecured (IRS/state tax) - if NOT, then I believe (if memory serves) that you could theoretically have a 13 with a very low payment...

[AZBK13]

Well that's the thing. There was a protracted "negotiation" period before my final plan payment was arrived at and approved. Now that it is finally settled, I think it is well established that we cannot afford any more. I think the plan payment should not be as high as it is, but the trustee is a jerk and my lawyer could be better.

So would we end up starting over, providing all the documentation of every little thing, or would just the changes be considered in any possible future adjustment? I mean, with this aggressive plan payment, a drop in income would mean that we could no longer afford it. There is almost no wiggle room.

[LadyInTheRed]

To modify your plan, you very well may have to provide documentation of all income and expenses. There may be a minimum amount you have to pay in order to have a feasible plan, regardless of whether you can afford that amount. The best way to get answers to your questions based on your very specific circumstances is to ask your attorney. All we can do here is speculate on possibilities of what may happen based on general assumptions.

[frogger]

There was a protracted "negotiation" period before my final plan payment was arrived at and approved.

No such thing as a "final" plan. Plans are subject to change based upon the debtors circumstances with income and expenses. When you say final, you actually mean final based upon the current financial numbers.

Plans may go up based upon a debtors ability to pay, plans may go down based upon a debtors ability to pay.

It is not uncommon for plans to change during the course of your bankruptcy, so get with your legal council and provide the new numbers.