We have said before that Illinois individuals can find themselves in dire financial trouble through no fault of their own. If there is anything fresh in everyone’s mind since the last Great Recession, it is that our conditions can change in no time flat. Bankruptcy in the form of either Chapter 7 or Chapter 13 filings are the means by which the government makes it possible for people and businesses to keep their heads above water, find relief and get back on solid footing.

Bankruptcy filing does a few specific things that help those in trouble. It protects you from tough collection actions by creditors. Depending on which chapter you may qualify for, it might be possible for you to keep your home, your car and other property. To know specifically how things work, it’s always best to understand all your options.

Under Chapter 13, the person seeking relief enjoys a steady income stream that includes some limited disposable funds. The court requires the filer to work out a structured plan to put as much money as possible toward what is owed to creditors. If the approved plan is followed and the conditions are met over the time frame called for, typically three to five years, any debts remaining are eligible to be written off.

Of course, as we already mentioned, conditions can change suddenly, for the worse and for the better. Because of that, it’s possible to seek modifications of a bankruptcy plan. It is a two-way street, however. If a filer suffers a greater income loss during the time of bankruptcy, approval for lowering payments might be sought.

On the other hand, if your income increases during the period, creditors have a right to seek an increase in payments. Indeed, as the federal Seventh Circuit Court of Appeals recently ruled, a Chapter 13 trustee may return to court to amend a plan even after the five years of payments are completed.

In the case in question, the couple in bankruptcy had realized a $50,000 increase in income during one of the years of their five-year period. The case has been remanded to the lower district court for further consideration based on the appeals court’s ruling.

What this shows is that the law is dynamic and the importance of working with skilled counsel.