Most Chapter 13 cases are designed to last five (5) years. In today’s economy, 5 years can be a very long time. Employers go out of business, job descriptions change, and you may very well be working for a different company after you file your case.
If your income changes – for the better or for the worse – during your Chapter 13 case, what should you do?
The Chapter 13 trustees in the Northern District of Georgia advise us that they expect you to file an amended budget if your income changes more than 5%. This does not necessarily mean that your plan payment will go up, although that could be the result. Household expenses can also go up and when we sit down to look at your new budget, we may discover that increased expenses will eat up the difference between your old salary and your newly increased salary. If this is the case, we will argue that your plan payment should remain the same.
If you really do have more disposable income then the trustee will expect us to increase your plan payment accordingly.
If your pay goes down, we have the option of also filing a post-confirmation modification to your plan that reduces your monthly Chapter 13 plan payment. All creditors would have to be served with notice of this proposed change and we would likely have to appear before your judge but if you have less disposable income then your plan payment needs to come down.
The important thing to remember about changes to your budget is that you should keep our office updated as to these changes. Remember that we are your advocates and that we want your plan to work and we want you to have enough money available to pay your bills and sustain a reasonable lifestyle.