Expert: Terry Leeders - 6/2/2008

Question
QUESTION: If someone files 13 and shortly after either he gets a large increase in income or on the other side, looses his job to the point of not being able to pay the monthly amount, what happens? Do they come back and say "you earning too much now we need more from you" or "you lost your job and your monthly due will be reduced"?

ANSWER: Normally, unless otherwise ordered by the court, you do not need to report a positive change in circumstances once your plan is confirmed by the court.  Now, if you have a negative change in circumstances, you can petition the court to lower the payments, defer or suspend payments too, based on need, so talk with your lawyer to help you here.

---------- FOLLOW-UP ----------

QUESTION: Thanks, actually, by an income increase I meant if I let a couple rental house mortgages go into forclosure (each has negative cash flow) after I file for 13.

Answer
If you bring a motion to modify the plan to surrender your interest in the properties, the court will ask about rental income. If the rental income is still there, then the budget would be the same, if the rental income stops, that would be factored in as well by removing that income and the mortgage payments from your budget.  Always speak to your bankruptcy lawyer to advise you of all the ramifications of this.  Thanks