Family Medical Leave and Chapter 13 Payments
By L. Jed Berliner, Western & Central Massachusetts Bankruptcy Attorney on Jun 25, 2009 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy
If your Chapter 13 payments are set by the Means Test and not only by mortgage and priority tax arrears, then a Family Medical Leave can reduce your payments.
The Means Test looks at your average monthly income for the six month period ending with the month before your filing. If you have not yet filed the bankruptcy case, you can take the leave and, upon your return, use it to have reduced your average monthly income and your required Chapter 13 payments.
If you have not yet filed but cannot wait until the leave is used, then you an argue that the anticipated leave is a Special Circumstance justifying a reduction to your Means Test required payments.
Finally, if you have already filed and your Means Test required payments are set, then you can use the leave to reduce payments through a modified plan, or seek a Chapter 13 hardship discharge, or convert to a Chapter 7 case.
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