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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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If you start a chapter 13 and down the line cant afford the

Customer Question

If you start a chapter 13 and down the line can't afford the payments, what happens? And if you go into foreclosure after you've dropped out, are you still liable for the loss on the mortgage? And can they look at your income throughout the time you're in a 13 and make your payment higher?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

1) If the debtor can no longer afford the full monthly payment, he can ask for a modification in the payment amount, or he can ask that the case be converted to a Chapter 7. If the debtor does neither of these, the Bankruptcy Trustee will dismiss the case - usually after one or two missed payments.

2) If the case is dismissed, and there is a mortgage involved - the debtor again becomes liable for the balance of the mortgage.

3) The Trustee will want to see the tax returns for each year the plan is in effect, and will increase the plan payment with an increase in income.