Income Decreasing month after month, Modify CH13?

[Franco]

My employer basically closed hundreds of stores nationwide due to the pandemic, and they sent 6 additional sales reps to my store, transfers basically. Now what this means is I don't help as many customers and my commission is SERIOUSLY impacted. On an average month, for the past 2.5 years while in this CH13, my commission checks are around $1200-2000, usually in the middle around $1500.

Now, for the past 2 months my commission checks have been $600 for September, and $300 for October. We went from having 5 sales reps, to 11!! Basically I don't get to help as many customers to make commission like before. The only good thing is I have higher seniority on all of them so if this company decides to lay off some, they would get the boot first.

This will most likely continue going forward. Which sucks to say the least. My CH13 plan is not a 100% plan if that helps. I'm paying off my 2017 Truck and unsecured debts are getting payed very little, the truck is the only "secured debt". I emailed my lawyer/paralegal I was just curious if y'all have been through this, a serious drop in income.

[justbroke]

I will continue to be of the opinion that entering a Chapter 13 when the debtor receives commission, as a part of or as all of their salary, can be difficult to manage. I say this because the Chapter 13 plan is aspirational, blue sky, with all the ducks aligned and quacking in unison. If anything happens with fluctuating commissions, and the plan was based on that blue-sky view, it quickly becomes an infeasible Chapter 13.

I do not know how your Chapter 13 Plan is structured, but if you estimated commissions and the plan was based on that estimated commission, that's the big problem. Yes, you should absolutely seek a modification of the plan, but I would also seek to put in some changes with -- perhaps -- quarterly reporting to the Chapter 13 Trustee so that you are not paying more than you're earning.

Hopefully your attorney can file a motion to modify immediately and immediately change your payment schedule. There's really no way to deal effectively with commissions in a Chapter 13, especially if they are more than a mere 10-20% of the debtor's overall income.

I wish I had better news for you, but your attorney "can" do something by at least getting a payment abatement for now (rolling the abated amounts sometime into the future), and then coming up with a feasible plan.

[Franco]

Thank you JB! Always great advice from you. Yes I remember they did that look back period of 6 months and commission was factored in before they made my CH13 plan. It's just that times are changing, and with my company honestly I don't know what is going to happen. I'm sure my attorney or his paralegal will get back to me Monday hopefully. It's just so bittersweet, I'm half way through completing my CH13, and all this is a curve ball right now. LOL it doesn't help that all these new sales reps at my store are early twenties that live at home and they are basically working for money to go to clubs haha. Meanwhile me and the reps that have been there a while have legit bills and houses to pay for. But that's not right to say, just annoying to be honest having young folks there eating my lunch.

[justbroke]

Personally, if you ask me, the fact is that most Chapter 13 Trustees use the Means Test as the "starting point" of the inquiry into how much a debtor should pay. These plans are often "aspirational" (as one bankruptcy judge quipped), and are based on past facts (the lookback) rather than what is happening now. Although the Lanning decision (U.S. Supreme Court in 2010) gives us the ability to look forward, it's still more aspirational than actual.

[Franco]

Well, spoke to my Attorney today and he could get my monthly payments down only $50, and it would cost me $850 (his fee) to do this, he would include that fee in my plan over the length of the plan. Basically I'm only paying off my Truck & Trustee, the unsecured debts are being payed back very little. He did explain how we could use Covid as a reason and extend my plan much longer making smaller payments but we both agreed that we want to get this done sooner than later, after all I only have just under 3 years to go.

It was reassuring to know that I can easily Convert to a Chapter 7 if I get laid off, and have to find a quick job to make ends meet. I would lose my Vehicle though, but this is why I planned my move years ago, I moved to a very up and coming, thriving area of Arizona. There's jobs to be had in walking distance or a short Lyft ride if I had to get a job just to pay rent and eat peanut & jelly sandwiches lol.

For now I guess I'll just keep on going, work harder etc. I don't want to make waves with the Trustee just to save $50 per month to be honest. We'll see how it goes.

Thanks Again JB!

[Carmella]

Franco I hope something will pick up for you at work. Maybe transferring the other employees in will fizzle down. I imagine all of the employees are making less commission than they use to, which would lead to some of them looking for other jobs when the opportunity strikes. Maybe this will be temporary and not through the next 2.5 yrs.

Our chapter 13 was built around the income on both of my jobs even though the "as needed" job could vary from literally 0 a month to $800. Normally it was around $500 give or take a little per month

I lost my second job (I still have it, but I can't work it, at least they didn't terminate me yet) due to the pandemic. I keep thinking it will pick up after the pandemic and since I work in a nursing home I haven't even looked at "as needed" jobs opening up since the covid testing would be a nightmare if I had to do it at two different work places. I can deal with the very uncomfortable test, but if I had to coordinated with two places that may or may not have any outbreaks I would rather wait it out. Our saving grace at the moment is the mortgage is paid so that frees up some cash we don't have to pay.

But it's still not enough to get my husband's car fixed as it sits in the drive way and we car share. Since we pay all cash I want to save up more than needed. That's another story!

I hope your work group will thin out over time freeing up more commission opportunities for you.

And I agree I wouldn't want to bother with $50 a month and pay $850!

[Franco]

Thank you Carmella! I hope your situation improves as well, it's tough ain't it? What really scares me is Biden coming in and shutting down America, I know there is an increase in new Covid cases, but I feel that shutting down everything will only temporarily drop the infection rate. This will also KILL so many more jobs. A job like mine, Retail, was strongly impacted because customers didn't buy in store anymore they shopped online. Yes I don't blame them, but this also killed my commissioned sales.

I was also strongly considering a 2nd job, but then the Trustee would see I'm making more, with tax returns and all, and he would want more for his pocket$$$ lol.

[Barbisi]

Franco, leaving all politics aside, I hope the promised vaccines will eventually eradicate this horrid Coronavirus for good and allow life to return to a semblance of near-normal, ensuring that your commissioned job will go on and see you through this BK13.
Carmella, I hope you can get that second car fixed soon - it's certainly a pain to have to rideshare! And hopefully once Covid-19 disappears,your second job will return.