A Chapter 13 bankruptcy typically sets up a payment plan that is meant to last 3 to 5 years. The bankruptcy trustee will calculate the payments needed to repay all of the secured debts, such as house and car. The Chapter 13 bankruptcy payment calculation is based on the income level that you have during the bankruptcy process. If your income should change significantly, either increase or decrease, your Chapter 13 bankruptcy payments might go up or down.
The Chapter 13 bankruptcy trustee will review your case periodically to determine if your payment should increase. This review is based on your pay stubs, bank statements, and tax returns, which are available to the trustee for evaluation. If your income increases, your bankruptcy payment could increase.
If your income decreases or you lose your employment altogether, you will have to file a motion with the bankruptcy court to have your Chapter 13 payment plan modified downward. In this situation, it is best to have a knowledgeable bankruptcy lawyer available for consultation and assistance. In Phoenix, Arizona, the bankruptcy attorneys at The Frutkin Lawfirm, PLC, are experienced in all facets of Chapter 13 bankruptcy, including payment plan modification
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