Chapter 13 Bankruptcy: My Income Has Changed
If you are in a current chapter 13 or thinking of filing a chapter 13, you may be wondering what happens if your income changes during your pending bankruptcy. This is an excellent question, as a chapter 13 bankruptcy commits your disposable income during the 3-5 years of the case.
If your income changes more than cost of living (which is typically about a 3.5% increase), your attorney will want to do a modification with you. This will entail looking through your income and expenses again and adjusting your plan payment, if need be. If income has increased, to where you have more disposable income than when your case was originally filed, your plan payment may have to increase, so your creditors are paid more.
If income has increased, but expenses have also increased, your attorney may amend your income and expenses to show, even though income has gone up, so have expenses.
If income has decreased, depending on what needs to be paid in your plan, your attorney may be able to decrease your plan payment.
It is important to remember to reach out to your attorney with any questions you may have about your income and expenses during the chapter 13 bankruptcy. The above are general comments about income and expenses, but every case is different.
Modifications to your chapter 13 plan will need to be confirmed in a hearing. Typically, you do not need to attend this hearing, as it usually goes by default.
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For any questions you have regarding your income or expenses for a chapter 13 or bankruptcy in general, visit www.lifebacklaw.com to speak with an attorney today. You will be glad you did!
