When filing a Chapter 13 Bankruptcy, many individuals are very concerned about what will happen if there is a change in their income. A Chapter 13 is a repayment plan that is largely based upon a debtor’s income and expenses. In some cases the payment is based on tax debt or mortgage arrears. The payments vary considerable on a case to case basis.
If a person files a Chapter 13 and there is a significant change in circumstances, it is possible in most cases to go back to the court and ask for a reduction in the payments. It is also possible in some cases to ask that the case be changed from a Chapter 13 into a Chapter 7 liquidation which does not involve repaying the creditors.
When a person enters into a Chapter 13, it is important that they stay in contact with the attorney who represents him or her. Oftentimes problems can be addressed in the Chapter 13, if the attorney is informed.