Petitioning to lower payments

[missed01]

My wife works for the federal government and due to the sequestration, starting in April barring a last minute fix she will be forced to take a 20% pay cut each week for the remaining 22 weeks of the fiscal year. My question is has anyone ever had to petition to lower payments due to unforesen and unavoidable circumstances on our part?

A little history: We are in a 16% plan and in Oklahoma we are required to give the trustee 100% of our tax returns each year which after 40 months in has allowed us to reach our plan base. We are currently $8500 ahead in our payments, our secured creditors have been paid in full, we pay our mortgage outside of the plan and are current with only unsecured creditors remaining. According to our lawyer and the chapter 13 website we owe $0 to all creditors but he said not to get our hopes up that the court would accept the pay cut as a "good enough" reason to lower payments. Due to the pay cut, the health insurance premiums that is deducted for our family will increase and lower our take home pay quite a bit.

[kornellred]

That whole "percentage" thing notwithstanding - you cannot be in a "16%" payback plan (on unsecured debt), be $8,500 "ahead" on payments and owe 0% to listed creditors. Any one or two of those conditions could be true, but not all three.
And none of that has anything to do with whether you can have your payments lowered. If you cannot make the Chapter 13 payments as confirmed, then your attorney requests a modification of the Chapter 13 plan, or if you are pro se - then you make the request.

[keepsmiling]

What he said^ although it sometimes seems to depend on local practice when it comes to paying the "plan base", Occasionally folks do post that they are done sooner than they expected to be even when not in 100% plans.... however...
20% pay cut plus higher expenses sounds like a "good enough" reason for a mod to me. Perhaps your lawyer is wary that it will open your plan up to scrutiny.

[159515951]

I understand completely what he's saying. His plan is paying back 16%, and due to tax returns he's ahead of the game on payments, and has already paid back the originally projected 16%.

That said, I'm sure the Trustee will be glad to pay more to your unsecured creditors. They won't shorten your payback period unless you're in a 100% plan and finish early. However, you can petition the court to lower your plan payments if you have a reduction in income, just as you can expect your plan payments to go up if you have a significant increase in income.

[missed01]

I understand completely what he's saying. His plan is paying back 16%, and due to tax returns he's ahead of the game on payments, and has already paid back the originally projected 16%.

That said, I'm sure the Trustee will be glad to pay more to your unsecured creditors. They won't shorten your payback period unless you're in a 100% plan and finish early. However, you can petition the court to lower your plan payments if you have a reduction in income, just as you can expect your plan payments to go up if you have a significant increase in income.

Yes, that is what I was trying to say (guess I wasn't specific enough) just like we know that 60 months actually means 60 months. We are starting the paperwork to request to lower our payments and hope to get this done within the month.