What happens if you are in a Chapter 13 repayment planand then suffer a loss of income?

UPDATED: Jun 18, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What happens if you are in a Chapter 13 repayment planand then suffer a loss of income?

We filed for a Chapter 13 bankruptcy about 18 months ago. Have been making payments but went through back surgery for a third time. Could face disability and have a 40% cut in my wages and supply my own health insurance. What advice do you have for us.

Asked on June 18, 2011 under Bankruptcy Law, Missouri


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There are often situations that occur so that you will become unable to make the payments as outlined in your repayment plan.  For instance, if you lost your job after getting into the repayment plan or, as in your situation, you suffer a reduction in pay. In such a case the bankruptcy trustee may be able to modify your repayment plan according to your new income.  Additionally, if making payments on the repayment plan would pose an undue hardship (e.g. if you had a lengthy hospital stay or convalescence), a bankruptcy judge has the discretion as to whether or not to discharge your debts outright. However you may not have paid enough down in just 18 months.

If neither of these options were available to you, you may be able to convert your Chapter 13 reorganization to a Chapter 7 liquidation.  At this point you should consult directly with a bankruptcy attorney in your area, or at least contact you bankruptcy trustee to inform then of your situation.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption