Hi there, this is Jonathan Ginsberg. I’d like
to talk to you today about what happens if you’re in chapter 13, you’re
a debtor in a chapter 13 case, and you’re family situation falls apart a
little bit and you end up filing for divorce or becoming a defendant in a divorce
proceeding, and your whole budget changes, your household changes, now
they’re two households, you don’t have your spouse’s income, all that
type of stuff. And obviously, just as an overview, chapter 13 is really
designed for stability, so it’s definitely a problem if you find big changes
in your budget when you go into chapter 13, because your plan was no
doubt designed based on a set series of numbers, your income, your expenses,
and now that’s all the changed. Well the first thing you need to do, you have
to talk to your bankruptcy lawyer. You want to let him know as quickly
as possible that something’s going on. Because it’s much better to be in
front of these types of things and be proactive and the type of things that
I do, or I have done, one would be you can ask the court for a two or
three month deferment in payment obligations. So you can buy yourself
a little bit of time to get back on your feet. If that means you have
to get into an apartment, or you have to assume certain obligations that you
didn’t otherwise have, you may need a little time to to get back on your
feet. The second thing is you need to get new budget
numbers. And I realize that these things that can change, but if at all
possible, you want to look at the budget you filed and then redo that and
come up with as clear numbers as you possibly can. Because what you can
do is you can file a post confirmation, which is that when the cases
approved, a post-confirmation amendment to your chapter 13 that reduces
your chapter 13 plan payment to reflect the new reality of your situation.
It could be reducing your planned payment or it could be reducing your
percentage debt unsecured creditors, the debt repayment to unsecured
creditors, all of those things. You may need to go to a hearing in front of
the judge, but if you can document that you have less coming in, that
you have increased expenses or different expenses, but you’re doing the best
that you can, given your new reality, usually the judge will be pretty
amenable to making that change. Again, all creditors are going to get served
with this, and your soon to be ex-spouse, or ex-spouse may be a creditor,
will get served with this as well, so you may get some push back from your
ex souse or other creditors, especially if changing your plan negatively
effects your soon to be or ex- spouse, but nevertheless you have to do what’s
best for you. I’ve had a number of these cases over the
years and again, as long as I have real numbers, not just what we think
may be, or what we hope may be, but real numbers, we can either a, buy some
time at the outset, and b, we can go ahead and change the plan to reflect
the new reality. In my experiences the judges will be receptive as
long as you are doing the best that you can. Now, realize that chapter 13 in general, the
trustees are going to want to see every dime that they can that is disposable.
When you go through a budget change, especially if you’re reducing
your payment, they’re really going to want to see documentation, so that
means saving your receipts for things like groceries and utilities, things
like that, to show that you are in fact paying all these things. If you’re alleging that you’re paying child
support or alimony, you’re going to have to have proof and copies of
cancelled checks, proofs that you actually made these payments, because the
bankruptcy court for some reason, is very, very concerned about you not making
payments on alimony and child support. Again, not that they shouldn’t be concerned
about it, it seems to be it’s not really a bankruptcy issue, it’s more of
a domestic relations issue, but nevertheless, the court is going to want you
to document that you’re making these payments and to verify with some various
forms that in fact, you have. So you want to keep some records. I
think that’s really another big thing, is keep records of all the things that
you’re doing. But if you do that, and you deal with your
attorney quickly, and you come clean with all the information and you make
sure that it’s very clear, usually we can go ahead and get your plan
adjusted to make it something that is feasible given your new reality. And
again, that may be going in front of the judge and maybe negotiating with
the trustee, but all of these things can be done to make your case viable
and keep you in bankruptcy, so that you don’t lose the benefit of what you’ve
worked hard to achieve in terms of your plan and that you get the benefit
of the bankruptcy discharge, when it does come along. I hope this has been helpful, again, Jonathan
Ginsberg here. Ginsberg Law Offices in Atlanta, Georgia with any questions,
please let me know. Thanks a lot.