How Life Events Affect Chapter 13 Payments

Chapter 13 assumes stable income over time — but real life rarely cooperates. The law allows Chapter 13 plans to be modified when legitimate life events change your financial reality.

---

Common Life Events That Affect Payments

Income-Related

• Job loss

• Reduced hours

• Short-term disability

• Unpaid leave

---

Family-Related

• Birth of a child

• Divorce or separation

• Loss of household contributor

• New child support obligations

---

Health-Related

• Illness or injury

• Ongoing medical costs

• Mental health treatment

---

What Changes Usually Justify Modification

To modify a plan, the change must be:

• Involuntary

• Significant

• Documented

• Ongoing or long-term

Temporary inconvenience alone is not enough.

---

Possible Outcomes

Depending on circumstances:

• Payment reduction

• Temporary suspension

• Extended plan length

• In rare cases, hardship discharge

Early communication makes outcomes far better.

---

Key Takeaway

Chapter 13 is rigid — but not blind.
Life events matter when handled correctly.

---

Maternity-Leave Bankruptcy Timing Decision Chart

Bankruptcy & Maternity Leave: Timing Decision Chart

Use this chart as a general guide, not a substitute for legal advice.

---

Step 1: Are You Currently on Unpaid or Partially Paid Leave?

⬇️ Yes

→ Step 2

⬇️ No

→ Step 4

---

Step 2: Are You Receiving Short-Term Disability or Paid Leave?

⬇️ Yes

✔ Income may still qualify for Chapter 7
⚠️ Chapter 13 feasibility depends on amount

⬇️ No

✔ Strong Chapter 7 potential
❌ Chapter 13 usually not feasible

---

Step 3: Do You Expect Income to Return Soon?

⬇️ Yes

⚠️ Timing is critical — waiting or filing now can change outcomes

⬇️ No / Uncertain

✔ Chapter 7 likely preferred

---

Step 4: Filing Before Leave Begins

⬇️ Income still high
❌ May force Chapter 13

⬇️ Filing after income drops
✔ May qualify for Chapter 7

---

Emergency Override

If you face:

• Eviction

• Foreclosure

• Garnishment

• Utility shutoff

➡️ Filing immediately may be necessary regardless of timing.

---

Key Takeaway

Small timing differences around maternity leave can:

• Change the chapter you qualify for

• Change whether bankruptcy helps or hurts

• Determine long-term affordability

Planning matters.

---

Final Reassurance

Pregnancy, maternity leave, and disability are exactly the kinds of life events bankruptcy law is meant to accommodate. The key is choosing the right chapter at the right time.

---

Talk to a Bankruptcy Attorney Before Filing

If you are on maternity leave, short-term disability, or have no income, do not guess about bankruptcy timing.

Ginsburg Law Group helps clients:

• Coordinate bankruptcy timing with leave

• Choose Chapter 7 vs Chapter 13

• Modify plans when life changes

• Protect families during financial transitions

 

BANKRUPTCY TEAM

AMY GINSBURG – aginsburg@ginsburglawgroup.com

GRACIE KLEIN – gklein@ginsburglawgroup.com

NICOLE LOMBARDI – nlombardi@ginsburglawgroup.com