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If your financial circumstances change in the middle of a Chapter 13 Plan, you can frequently file a Motion to Modify the Plan to reduce the payment amount, or reduce the duration of the Plan. If this is not feasible, you can also sometimes convert the Chapter 13 to Chapter 7 and get a discharge. Of course, reducing the Plan payment amount or conversion may have an adverse affect on certain debts, such as if you are catching up home arrearage or paying for a car in your Chapter 13 Plan and those debts are not paid yet. Or, if you are in Chapter 13 to protect equity in an asset beyond your exemption limits, you may have issues if you try to reduce the Plan payment so much that you are no longer paying enough to protect those assets (called the Best Interest of Creditors Test). Or, if you filed a Chapter 7 within 8 years of the filing date of the current Chapter 13, you cannot convert the Chapter 13 to Chapter 7. So, there are lots of issues that can come up with changing a Plan payment or conversion, but these options are frequently helpful so I strongly recommend you advise your attorney of your decrease in income so you can see which option suits your circumstances best.
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