Significant loss of income

[kyboy]

Hello everyone. We have now been paying $750.00 per month for 14 months now. Over the past 14 months our income has dropped $625.00 per month making it a struggle to continue. Our attorney has requested that we bring in our pay stubs at the end of this month and he will try and "make things easier". Does anyone have any idea what will happen in a situation such as this?

[justbroke]

Yes.

Your attorney will gather your paystubs and then file a Motion to Modify Confirmed Plan. He does this by first getting your current "ledger" from the Trustee and then modifies it so that you are still in compliance with certain aspects of the plan. (The certain aspects could include a "minimum" dividend that you must pay to the unsecured creditors because of some non-exempt property you are keep. Rather than making this a complex answer, let's just say that it's okay to modify your payment.)

Then, your attorney will file the Motion and the new ledger. (Filing the new payment ledger may be a local District rule.) Depending on your District, your Attorney may be able to file that Motion with a negative notice, meaning that if the Trustee doesn't object to it, it is granted (unless the Judge doesn't like it). Usually, your attorney will work with he Trustee's office to make this a smooth and "agreed" upon modification order. If it's not agreed too, your attorney will have a hearing scheduled for 21 days after submitting the Motion to Modify. At the hearing, the Judge wil listen to the Trustee and your Attorney and make a decision.

These are usually granted, unless the new payment amount doesn't satisfy some term in the original Order, such as a minimum dividend to unsecured creditors.

[car67]

Most likely you will get a reduction in payments for 3 months and if at the end of three months your income doesnt improve then you can start the process to convert to a Chapt 7... Thats where I am at in the process... Switching from 13 to 7 due drop in income and we had reduced payments for 3 months hoping the economy would turn to fund the plan but no luck yet

[car67]

Attorney has filed the papers to switch to a chapter 7 got letter from court accepting the filing and i guess the 341 hearing is soon for the chapt 7 case havnt heard yet.