In these unprecedented times, there is so much uncertainty in the world that many individuals with steady, good paying jobs, are hunkering down in survival mode for fear of what might happen next. That is a completely normal and healthy response to have in this situation, but if you need help with your finances, you should not let fear of the unknown stand in your way.
Maybe you have already met with an attorney and you have been told that your only bankruptcy option is a Chapter 13, or you have done the research and determined that on your own, and now with the economy in crisis, you are reluctant to move forward with getting the help you need for fear of what may come. However, you should know that we can help you prepare for what may come down the road, while still getting you the help you need now.
Although Chapter 13 bankruptcy payments are based on your income and your expenses, and we write those plans for three to five years in the future, they are definitely not written in stone. If you file a Chapter 13 bankruptcy and your income decreases, you need not worry, there are options to continue on the path to your desired financial fresh start. (As a general disclaimer, it is important to note that individuals file Chapter 13 bankruptcies for different reasons, and they can contain certain requirements that may limit our options, however, when we meet to discuss your filing, that is something that we will discuss with you prior to filing.)
Your Payments Could Decrease
If during the course of your Chapter 13 bankruptcy, you lose a portion, but not all, of your income, and could still afford to make a payment in some amount, we could explore decreasing decrease your monthly payments. The process for decreasing your payments is called a plan modification and it requires filing a motion with the court to decrease the monthly payment amount based on the change in your income. We would need to review information about the your change in income, and if that, together with your expenses, warrants reducing the monthly payments, we would move forward with filing a plan modification with the court and, once approved, your monthly payments would change to the new, lower payment for the remainder of the plan, subject to any additional provisions of your plan.
Your Payments Could End
On the other hand, if your lose most, or all of your income, you may be able to convert your case from a Chapter 13 bankruptcy to a Chapter 7. You would need to provide documentation showing the decreased income and then, taking your expenses into consideration and determine if you still had the ability to make payments in some amount to your creditors. If the decreased wages resulted in a situation where you could no longer make monthly payments to the Chapter 13 Trustee, then you would be eligible to convert your case to a Chapter 7 bankruptcy and get the discharge much more quickly than if you were to remain in a Chapter 13.
Other Considerations
Although in most cases when we discuss the unknown, we are discussing it in relation to income, there definitely are other things that can change during the three to five years that you are in your Chapter 13 bankruptcy. Whether it is that you decided to sell your home, surrender your home, surrender your car, or that you need to purchase a new car, rest assured, those are all things that we can address through a plan modification, if needed.
What we want you to know is that there are enough things out there to worry and be fearful about, but filing a bankruptcy should not be one of them. If you need help now, please call us for a free consultation, and if, after you have filed, something changes, we will help you through that as well!
Call Now for a Free Strategy Session from a MN Bankruptcy Lawyer from Kain & Scott
When the time is right, or when you are ready, reach out to Minnesota’s LARGEST bankruptcy law firm at www.kainscott.com. You will be glad you did!
A Word from a MN Bankruptcy Attorney, Wesley Scott
