Just started Ch 13 plan but husband got laid off!

[KAKRN97]

I filed my Ch 13 on 5/28, had my 341 hearing on 6/23. I had to file a Ch 13 because with my husband going back to work in April, we had too much DMI. My payment plan is $1353/month. DH brings home about $400/week at his job but as we told the lawyer at the initial meeting back in April that his job was on shaky ground. He came home from work Tuesday to tell me he had once again been laid off for an undetermined amt of time. He thinks it will at least be through the rest of the summer. That's what they told him last time except he was laid off the week after Christmas..told him they'd bring him back in the spring and his lay-off ended up being 15 months.

Had I filed in Feb or March, I would've qualified for a CH 7 no problem. Since we had too much DMI with Dh being back to work, I had to file a CH 13. Now he's laid off again.

I called the lawyers office today and was told that the lawyer is out of the office, the paralegal is on vacation and the assistant to the lawyer was unavailable. So, anyhow, I have an appt to see the lawyer on July 14th to discuss my options.

Any idea how this might play out? Will we be able to convert to Ch 7? Or will the trustee modify the payment plan to reduce my monthly payments? I don't want to not pay anything if I can't convert to a 7.

Has anyone else been in this situation?

[NowImDownInIt]

It sounds to me like you should be able to convert no problem.

[justbroke]

Depending on your District and Trustee, a Chapter 13 debtor who is having trouble will usually first get a temporary reduction or suspension of plan payments. These payments can then be refactored or made-up with or without a formal plan modification; again, depending on District. Most Districts just don't like to stop a Chapter 13 because a single employment or income incident occurred.

However, if the unemployment looks as though it will persist for some period of time they may then allow conversion. Conversion is your right, but procedurally you should follow the local process.

If you convert, you will need to qualify for a Chapter 7 and that means a DMI below $182.50 or as low as $109.58/month depending on the amount of unsecured debt.

You have done the right thing and have taken the first step by immediately contacting your attorney.

[KAKRN97]

Thanks for the replies. Guess I won't know much more till I speak to my attorney. I'm in Northern Ohio-Youngstown District if that helps any.

Like I said in my initial post, the only thing that prevented me from qualifying for a 7 was the fact that my DH had gone back to work and had been back for a little over a month on the day my 13 was filed. With his higher income being taken into consideration at the time of filing, it made me ineligible for a 7. I don't know how long DH will be laid off. They told him it wouldn't be long but then that's what they told him the last time and he was laid off from 12/27/08-4/13/10! And now here we are again.

I have 88K in unsecured/CC debt