Changes in Income During Minneapolis Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also called a wage earner’s plan, requires you to make payments on your debt. After completing credit counseling and having your repayment plan approved by the trustee, you use your disposable income to make those payments.

Life changes happen. If you get a raise or promotion, your repayment plan may need to be adjusted to reflect your new income. Even if unexpected challenges arise—like losing your job—changes in income during Minneapolis Chapter 13 bankruptcy can affect your plan, and it’s important to understand your options. Our experienced Minneapolis Chapter 13 bankruptcy attorneys can guide you through these situations and help adjust your plan when needed.

Income and Chapter 13 Bankruptcy

If you file Chapter 13 bankruptcy, you may not have been eligible for Chapter 7 because your income exceeds the state maximum—currently $90,000 for a household of two. The length of your repayment period depends on your income. When your earnings fall below the state threshold, you will typically make payments for three years. Those earning above the threshold usually follow a five-year plan. Any changes to your income must be reported to your bankruptcy attorney. Learn how an increase or decrease in salary during Chapter 13 bankruptcy in Minneapolis could impact your repayment plan—and how our team can help you make the right adjustments.

How Does an Income Increase Affect Chapter 13 Bankruptcy?

Your repayment plan generally stays the same unless your salary increases significantly within the first three years of payments. When you report an increase to your attorney, we’ll review how it affects your disposable income, taking into account any higher living expenses that may come with a larger salary. 

Reduction in Income During Bankruptcy

If you face money problems during your Chapter 13 repayment plan, let us know right away. Always report setbacks to our office so we can guide you through your options.

Missing a payment without contacting us could put your case at risk, but we can often help you stay on track. Our attorneys can ask the court to modify your payment terms, making your plan more manageable.

You cannot skip payments, but adjustments may be possible to help you through difficult times. Remember, you are not alone in this process. Our team will work with you to find solutions and protect the progress you have already made toward a fresh start.

We can also help you explore converting your Chapter 13 into a Chapter 7 if your circumstances change. For example, if your income decreases, you may become eligible for Chapter 7, which can address unsecured debt more quickly. The court considers your income over the past six months, so results can vary.

Falling behind on payments could put your Chapter 13 plan at risk, but you still have options. Our attorneys can review your situation and help you understand whether a conversion or other adjustments make sense for you.

Consult with our trusted attorneys to learn more about how a decrease in income could affect Chapter 13 bankruptcy proceedings in Minneapolis.

Speak with a Minneapolis Bankruptcy Attorney if Your Income Changes During Your Chapter 13 Repayment Plan

Life changes can affect your Chapter 13 repayment plan. Whether you lose your job or receive a raise or bonus, our attorneys can help you understand what those changes mean and guide you toward the best next steps.

Chapter 13 plans typically last three to five years, so it is common for income to change during that time. These changes in income during Minneapolis Chapter 13 bankruptcy can impact how much you can repay your creditors, but with the right guidance, you can stay on track and maintain control of your financial future.

Call our attorneys today to schedule a confidential consultation. We will review your situation, explain your options, and help you make informed decisions that keep your fresh start moving forward.