Reducing the Unsecured Creditors Pool (UCP)
One of my clients is having a difficult time because he and his wife recently both lost their jobs. He has found new employment, but had to take a pay cut and his wife is still looking for a job. She has only been unemployed for about 2 weeks. When they filed bankruptcy they were making good money and were required to pay back all their unsecured creditors. They now want to be able to reduce the amount being paid to their unsecured creditors to nothing.
I met with the client and explained that the best thing to do would be to wait until his wife finds a job before trying to reduce his unsecured creditor pool (amount being paid to unsecured creditors). If we were to file a modification now the Trustee would want us to turn around and file another modification once the wife got the job, and each modification we file costs $400.
I explained that based on their current income the Trustee would approve us reducing the unsecured creditors pool (UCP), but would condition it on the basis that once the wife got a job we amended her Income and the Trustee has the opportunity to go back and add the UCP back in, thus increasing their payments at the end of the bankruptcy. If we wait and see if she gets a job in the next month, we can use her new income to determine if we will be able to reduce the UCP.
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