Within certain limitations, chapter 13's may be dismissed or converted (switched over) to chapter 7s. However, it's generally advisable consistent with reporting reasonably anticipated changes to income on Schedule I, line 17, to recognize probable change and file the right chapter the first time around. It may be gray: it's incumbent upon prudent counsel to explore the options of chapter 7 and chapter 13 on your behalf. We do our best: there are no soothsayers here; loss of income can happen to anyone. This answer (as well as our Web site) doesn't address all facts & implications of the question; it's general info, not legal advice to be relied upon; it creates no attorney-client relationship; it may be pertinent to CA only; it's independent of other answers. Hire legal counsel before acting or refraining from bankruptcy/legal action.

Answer Applies to: California
Replied: 12/16/2011

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Generally, there are different approaches available in a situation where a debtor in chapter 13 has a change in circumstances, including but not limited to, a dismissal of the Ch 13, modification of the plan, conversion to a ch 7. The options vary depending on the individual fact specifics of the case.

Answer Applies to: New York
Replied: 12/15/2011

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You could wait and see and file a chapter 7 instead.

Answer Applies to: Utah
Replied: 12/15/2011

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If you file a Chapter 13 case and lose your job after the plan is confirmed, you can later convert your case to a Chapter 7 if you are able to exempt your real and personal property under Georgia's exemption laws.

Answer Applies to: Georgia
Replied: 12/15/2011

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If you are in a Chapter 13 and then you cannot make the payments, the case needs to be either converted to a chapter 7 or you need to dismiss the case. You will not be in trouble but you will not be able to continue with the Chapter 13 if you cannot meet the payment plan.

Answer Applies to: California
Replied: 12/14/2011

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A chapter 13 is a repayment plan bankruptcy. If you do not have income to make your plan payments, your chapter 13 bankruptcy will be dismissed. If you are having problems making your payments, you always have the right to convert a chapter 13 into a chapter 7 if you qualify.

Answer Applies to: Florida
Replied: 12/14/2011

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The key to a successful Chapter 13 bankruptcy is being able to make each and every monthly (or biweekly) payment to the bankruptcy Trustee. If you lose your job durin the Chapter 13, you MAY be able to "convert" to Chapter 7 liquidation if you so qualify at the time and are advised as to possible asset liquidation implications.

Answer Applies to: Indiana
Replied: 12/14/2011

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Yes the chapter 13 will be dismissed if you can't make the plan payments you may want to file a chapter 7.

Answer Applies to: Georgia
Replied: 12/14/2011

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If your income drops while you are in a confirmed Ch 13 plan you can modify your plan with lower payments. If your income drops enough you may be able to convert to a Ch 7.

Answer Applies to: Colorado
Replied: 12/14/2011

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Once a chapter 13 plan is approved there are certain rights that apply. For instance, if there is a change in financial situation such as less income or more expenses or loss of job the debtor can file a modification of the plan. It is also possible to apply for a suspension of payments.

Answer Applies to: California
Replied: 12/14/2011

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If you lose your job, convert to chapter 7

Answer Applies to: Illinois
Replied: 12/14/2011

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The amount you can pay in a chapter 13 plan is based on your disposable income (the actual amount you have to spend after your fixed expenses to survive on a modest lifestyle). In order for you to remain in chapter 13 and to at least get a plan confirmation, you would have to propose a plan showing that your disposable income can at least pay the priority debts (secured debts, taxes, etc) over the course of the plan. If you file chapter 13 now and actually confirm a plan, you will continue to pay accordingly. If you there is any change in income, such as losing a job, you would need to amend your plan to adjust. If your new plan is feasible, you can continue. If not, you will either be dismissed from bankruptcy or converted to a chapter 7.

Answer Applies to: California
Replied: 12/14/2011

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You won't get "in trouble" from the courts if you lose your job while in a Chapter 13. However, you may not be able to complete your plan payments so the case might get dismissed.

Answer Applies to: Ohio
Replied: 12/14/2011

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A chapter 13 is a payment plan. If you cannot make the payments the case may be dismissed and you are no longer protected from your creditors. Depending on your goals the payment may be lowered. You may be able to convert. These are discussions you should be having with your attorney on the case.

Answer Applies to: Michigan
Replied: 12/14/2011

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Trouble is a relative word. Since you are required to make monthly payments to the Trustee, you would still have to make them but you wouldn't have any income. You can get a Moratorium for a few months while you try to find a new job. If you could not start making payments again after your Moratorium was over, the Trustee would have your case dismissed.

Answer Applies to: Texas
Replied: 12/14/2011

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Your bankruptcy attorney can explain the requirements of qualifying for a Chapter 13 petition. If you lose your job it will require a modification to your Chapter 13 plan or it may require conversion to a Chapter 7, depending on your income and assets. The determination of the proper course of action will be factually dependent.

Answer Applies to: Massachusetts
Replied: 12/14/2011

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Depending on whether the plan is set up to run the maximum 60 months, you may be able to petition the Court to get a moratorium (reprieve) on the plan payments, usually for up to 90 days. If a moratorium will cause the plan to run over 60 months, you cannot obtain one and may need to later look at dismissing the ch 13 and re-filing, or possibly looking at converting it (or dismissing and re-filing as..) to a ch 7. You should consult a bankruptcy attorney on this because your issues appear to be complicated. Screwing up your initial filing may cause an attorney problems later on if you seek help to fix what you make an error on.

Answer Applies to: Ohio
Replied: 12/14/2011

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If you are not able to make the monthly payments, your case can get dismissed.

Answer Applies to: Georgia
Replied: 12/14/2011

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If you lose your job, your attorney can make a motion to convert your chapter 13 case to a chapter 7 and discharge the debt.

Answer Applies to: New York
Replied: 12/14/2011

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If you miss your payments, the case is dismissed and no discharge is granted. You generally have the option to convert to a chapter 7 and receive a discharge if the chapter 13 does not work out.

Answer Applies to: Florida
Replied: 12/14/2011

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It all matters why you are filing a ch 13 your payment can be reduced if income reduces.

Answer Applies to: Florida
Replied: 12/14/2011

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You won't get ion "trouble" but if you can't make your payments because you lost your job, your case will either be dismissed or would have to be converted to a Chapter 7. That means that if the reason you are doing the 13 is to catch up on a mortgage arrears are back car payments, etc, you would have to catch them up immediately or you would lose the property. Good Luck!

Answer Applies to: Michigan
Replied: 12/14/2011

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If you lose your job during a Chapter 13 plan of reorganization there may still be replacement income such as unemployment insurance or social security disability on which to rely. The point is your plan will continue in force as long as you make the payments if you are unable to do so however, then you must inform the Court through your attorney. Failure to let the court know may result in dismissal of your case, but telling the court rarely has such drastic consequences.

Answer Applies to: Illinois
Replied: 12/14/2011

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The basic question you ask (what happens if I fail to make my required Chapter 13 plan payments?) is easy to answer. If you are unable to make your required payments in a Chapter 13 case, the case will either be dismissed or converted to a case under Chapter 7. If you initiated the case in Chapter 13, then you will generally be able to choose dismissal or conversion. The more difficult issue is the question about whether you will get into trouble. If you are filing the case in order to stop a foreclosure and allow you to catch up on mortgage arrears, then it is possible that a future job loss will make it impossible for you to catch up on your mortgage payments. If the case is dismissed, the lender will be able to move to foreclosure again. If the case is converted to Chapter 7, where there is no mechanism to catch up it is likely that the lender will either (a) wait for you to get your discharge and for the Chapter 7 case to be closed in which case they will again be free to move for foreclosure as the automatic stay is only in effect while the bankruptcy case is open, or (b) move for relief from the automatic stay and foreclose during the pendency of your bankruptcy case. Neither option is great, however, a Chapter 7 discharge will at least remove your liability for a deficiency claim should you owe money to the bank even after the house is gone. If on the other hand your Chapter 13 is simply because of the Means Test or some other reason, you might be able to stay in Chapter 13 by simply amending your plan and seeking a new confirmation of the plan after a job loss.

Answer Applies to: Massachusetts
Replied: 12/14/2011

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You may have to convert to Chapter 7.

Answer Applies to: Georgia
Replied: 12/13/2011

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If you cannot make the Chapter 13 payments the case will be dismissed. Therefore, you might want to wait to see if you are laid off and maybe not file a Chapter 13 case if you cannot make the plan payments. You can also maybe file a Chapter 13 case and converted to a Chapter 7 if you cannot make the payments assuming that you otherwise qualify for Chapter 7.

Answer Applies to: California
Replied: 12/13/2011

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You won't get in trouble, but the trustee may move to dismiss your case. If you really do lose your job, you may then qualify to convert to a Chapter 7.

Answer Applies to: Maryland
Replied: 12/13/2011

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If you cannot make the payments in your Chapter 13 plan, you may need to explore modification of the plan, conversion to Chapter 7 bankruptcy, or dismissal of the case.

Answer Applies to: Colorado
Replied: 12/13/2011

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Not in trouble you just won't get a discharge

Answer Applies to: New York
Replied: 12/13/2011

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Once you file and you have a confirmed Chapter 13 plan, you obligation is to make those payments. If you lose your job and cannot make the payments, then your case would be set for motion to dismiss based failure to make payments. If you lose your job, you may at that time become eligible to convert he case to Chapter 7.

Answer Applies to: California
Replied: 12/13/2011

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If you are not able to make your Chapter 13 repayment plan payments because you were laid off, you may qualify for: 1. Convert to a chapter 7 bankruptcy. 2. Modify your plan to be more affordable proving undue hardship to the bankruptcy court. 3. Hardship discharge if you are closed to the end of your chapter 13 repayment and the unemployment rate was high wherever you reside. The answer is not intended as legal advice. The opinions expressed on this email are NOT INTENDED as legal advice upon which you should rely. Every person's situation is unique. You should consult with a bankruptcy attorney, licensed to practice law in your state, for advice about your particular situation. NO ATTORNEY-CLIENT RELATIONSHIP IS CREATED.

Answer Applies to: Minnesota
Replied: 12/13/2011

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You won't get in trouble, but your case may fall apart and get dismissed. If you anticipate change sin employment, it is vital that you talk to a lawyer and determine what you actually should file, as it makes no sense to file a case that is doomed from the start.

Answer Applies to: Georgia
Replied: 12/13/2011

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No. You will then have to decide to convert to Chapter 7 or dismiss the case. If future income is uncertain, you may want to consider filing Chapter 7 to begin with.

Answer Applies to: North Carolina
Replied: 12/13/2011

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You won't get in trouble, but the Chapter 13 plan would likely be dismissed for failure to make the plan payments, as I suspect that if you're unemployed, keeping up with it would be pretty much impossible. At that point, you could either let the case be dismissed or convert it to Chapter 7. If this is pretty much a foregone conclusion that you're going to be laid off, or even a strong possibility, perhaps it is better to start thinking in terms of a chapter 7 right from the outset.

Answer Applies to: California
Replied: 12/13/2011

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No, if you don't have income, as long as you can file an affidavit of support and find a family member or a close person to support you you're ok. If your payments in a chapter 13 plan is interrupted, however, you case will be dismissed.

Answer Applies to: Florida
Replied: 12/13/2011

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You won't get in trouble. Once you are in a 13 and payments are not made, the Trustee generally will file a Motion to Dismiss. This will give you and your attorney an opportunity to re-assess your situation. At that point, your personal situation may demand a short break in payments, a re-structuring of your plan, turning your case into a Chapter 7, or dismissing the case altogether. It all depends on your situation, what your goals are, and what you are qualified to do/capable of doing.

Answer Applies to: Wisconsin
Replied: 12/13/2011

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You may have an option to convert to a chapter 7.

Answer Applies to: Florida
Replied: 12/13/2011

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It really depends on how much and what you are paying in your chapter 13 plan. In some instances, your plan is as low as it can go; while in some other cases, you could modify the plan to lower your payment if you lose your job. You may also convert to a Chapter 7. You'll certainly have options and the best thing to do is to consult with an attorney to discuss how your job change would impact your Chapter 13.

Answer Applies to: Colorado
Replied: 12/13/2011

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Yes, that is the most common reason Chapter 13s are dismissed or converted. If you are looking at a potential drop in income, I would wait to file to see if you can pass The Means Test and qualify for a Chapter 7 especially if most of your debt is credit card debt.

Answer Applies to: California
Replied: 12/13/2011

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You won't "get in trouble.". You could convert to chapter 7 if lose your job.

Answer Applies to: California
Replied: 12/13/2011

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