If you are struggling with overwhelming debt, you need a solution that can help you recover financially without adding to your burden. That solution could be filing for bankruptcy. However, you must first decide which type of bankruptcy—Chapter 7 or Chapter 13—best suits your needs. If you determine that Chapter 13 is most appropriate, it is important to understand how future changes in income during Dallas Chapter 13 bankruptcy could affect your payment obligations.
Our seasoned Chapter 13 bankruptcy attorneys at Allmand Law Firm have the largest pool of bankruptcy knowledge in Texas. Among our 19 attorneys is Reed Allmand, the state’s only double board-certified bankruptcy attorney. He is Board Certified in Consumer Bankruptcy by the Texas Board of Legal Specialization and also Board Certified in Consumer Bankruptcy Law by the American Board of Certification. Our team is ready to apply our practical skills, experience, and knowledge to help you during this process.
What Is Chapter 13 Bankruptcy?
Unlike Chapter 7 bankruptcy, which requires you to liquidate your assets to settle outstanding obligations, Chapter 13 allows you to keep your property while repaying part of your debts. In a Chapter 13 bankruptcy filing, you must agree to regularly pay a percentage of your future income under a court-mandated reorganization plan to a trustee, who will use those funds to repay creditors. While you pay off your debts, the bankruptcy court protects you.
Qualifications for a Chapter 13 Filing
To qualify for Chapter 13 bankruptcy, you must have a stable income. There are no minimum or maximum income limits, but there are debt limits. Your secured debts, comprising automobile and housing loans, and unsecured debts, which include unpaid credit card or medical bills, must not exceed a certain level.
Our bankruptcy attorneys could review your earnings and debts in Dallas, explain how variations in earnings may affect your repayment plan, and advise whether Chapter 13 is suitable for your situation.
What Happens if Your Income Changes After You File for Chapter 13 Bankruptcy?
During the lengthy three to five-year period of a Chapter 13 bankruptcy, many debtors experience changes in their income.
When Income Goes Down
If your income decreases because of a job loss or pay cut, you may struggle to make regular payments under the court plan. In that case, you would need to file a modification with the local bankruptcy court. Depending on your debts and nonexempt property, the court may lower your payment amount.
When Income Goes Up
If you receive a significant pay raise or start a higher-paying job, you may need to pay more. Under the means test, disposable income determines the size of your payments to creditors. A higher salary increases disposable income, which could raise payment obligations. You should notify the court of any increase in income. However, modest cost-of-living raises usually do not trigger changes, especially if you can present evidence showing you cannot afford additional payments.
If you are facing income fluctuations while navigating a Chapter 13 bankruptcy case in Dallas, our bankruptcy lawyers could help safeguard your filing and ensure those changes in your earnings do not negatively affect your repayment plan.
Contact a Dallas Lawyer About Income Changes in a Chapter 13 Bankruptcy
Changes in income during Dallas Chapter 13 bankruptcy can affect your payment obligations. Contact the experienced local legal team at Allmand Law Firm to learn how to navigate this process. Let our seasoned attorneys address your concerns and help you find a solution that works.
