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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2523
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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We are 39 months into Chapter 13 bankruptcy. My husband is

Resolved Question:

We are 39 months into Chapter 13 bankruptcy. My husband is collecting unemployment since becoming unemployed in July. This cut in income left us $700 short of what we were making when we started our plan payments of $2700. Our lawyer was able to get our payments reduced to $2000 for several months but now we have been told we have to go back to the original $2700 payments starting this month (March). His comment to us was "tighten your belts". Without surrendering anything are their other options for reducing our plan payment?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 3 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

Chapter 13 plans are based on asset protection, and disposable monthly income. There is a set 'pot' to pay back into the plan. The plan can be modified on motion, to extend the case to 60 months, and lowering the payment accordingly, it can also be modified to lower the pot based on creditors who have not filed their claims. This is all that can be done based on a change in income.

Terry L. :

The pot must be large enough to cover any un-exempt assets.

Terry L. :

So, say you had $5000 in un-exempt assets, you would need to pay your unsecured creditors at least $5000 over the live of the plan, along with the other secured and priority debts and administative costs

Terry L. :

So, ask your attorney to look into these options. Perhaps, the lowered payment for several months was all that was available in these constraints.

Terry L. :

The other option is to look to convert to chapter 7 (assuming you haven't filed one in the 8 years before the ch13 was filed, and you don't have any assets that would be liquidated, or if the 13 was to stop foreclosure).

Terry L. :

You can then just wipe out your debts if there is no more disposable monthly income to pay to the creditors.

Terry L. :

Do you have any other questions?

Customer:

We make our house payment and there is nearly 100,000 in equity at this time can that be tapped into?

Terry L. :

Ah, your case may be designed to protect that equity. You can petition the court to take a home equity loan, to pay that into the 'pot' to reduce your plan payments, yes, that is an option. This is done by motion too, but you'll need to see if a lender is willing to do that as well.

Terry L. :

But it is possible, sure

Customer:

Also, I asked for a printout of what has been paid into our plan and exactly what has been paid to each creditor...the form I received was quite difficult to read but I was able to see that one of our vehicles has been paid in full.

Customer:

I may have my Masters degree but quite honestly deciphering this document sent me spinning. Is there something that can be sent from the trustee that is 'simple' in nature to show us where we are with each creditor?

Terry L. :

I have a link that may help, 1moment

Terry L. :

try registering here. it may be easier to decipher, seeing what payments have been made and what remains, which creditors have been paid what etc.

Terry L. :

Your attorney can also help answer those questions.

Terry L. :

I know, the trustee's periodic reports are sometimes complicated to follow, even for me!

Customer:

My attorney at times seems more condescending than helpful...I feel he does a good job but I also don't like to feel like I have two fathers. All of this that you have shared is excellent and does give me direction.

Terry L. :

That's good. I know these cases can seem complicated, and the attorney doesn't realize how complicated it really is for debtors

Terry L. :

if you have any more questions, don't hesitate to request me here in the future.

Terry L. :

any last questions?

Customer:

Thank you and I will certainly contact you in the future.

Terry L. :

Best of luck to you both.

Customer:

Thanks

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2523
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Terry L. and 4 other Bankruptcy Law Specialists are ready to help you

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