Expert: Mark J. Markus- California Bankruptcy Attorney - 9/29/2011

Question
I am currently in a Chapter 7 with automatic payment deductions. I was wondering if deductions will continue during my time on Short term disability?...or if I will have to send payments in?

Answer
Typically there are no payments required in Chapter 7 cases, unless you have reached some kind of agreement with the Trustee in your case to purchase non-exempt assets.

In a Chapter 13 case, you are responsible for making whatever payments your Plan requires.  If your budget changes so that you are unable to make the payments, you must file a Motion to Modify your plan to either temporarily or permanently change the payment.  This must be approved by the court after notice to all creditors and the Chapter 13 Trustee.  Whether and to what extent you can lower your payments depends on what types of debts you have, what your assets are and other considerations.  For example, certain debts--such as mortgage arrearages or some taxes--must be paid 100% during your plan term.  So, if lowering your payments would render it impossible for you to pay off those debts in the (maximum 60 months) plan, then you cannot lower your payments.

You need to discuss all these options with your (an) attorney because it depends on the specifics of your case, as well as the local rules of the bankruptcy court in your jurisdiction.

Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
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