Old Law Question Regarding Payment Alllocation/Raises

[southerncomfort]

We have 17 payments (of 38 total) remaining under our old-law Chapter 13. My husband has received a raise, which I know must be reported. My question is how the extra funds will be allocated . .

1. Will the payment increase and reduce the length of time left to pay OR

2. Will unsecured creditors be allocated some money? Our plan paid back priority and secured creditors (GMAC/student loans) 100% and unsecured creditors got $0.

I know there is a formula for figuring this out, but I don't know what it is or how to figure it!

Thanks for any guidance!

[southerncomfort]

Can anyone help? Surely someone has had this situation arise??? Please . .

[SinkingFast]

Old Law Ch 13 was handled differently,......... possibly,............ than New Law is supposed to work.

Old Law filers were on their way out when I first joined here.

Seems to me,............ Under Old Law,......... Once your Plan was set, that was what you owed. At least that's the way people talked. If you got a raise, or bonus, or whatever, that the Trustee took, your payment plan ended sooner than it was originally scheduled to.

There were some people here who paid off their Plans early. They wound up making an additional payment or 2 before the Trustee stopped their Wage Garnishment. After the Trustee did the Final Audit, the Trustee refunded the money they over paid.

Don't hold me to that, but that's the way I thought it worked.

Ask your attny just to be on the safe side.

[jal1129]

We filed 13 under old law and never had to report any raises etc. In fact both DH and myself changed jobs (him more than once, and I got a much better paying job during the plan) during the plan and it never changed anything for us. The trustee knew because of course the payments came out of DH paychecks which changed. I don't want to give bad advice so do check with your attorney on that but I had never heard of it.

For us once the plan was set, it was set.

[southerncomfort]

thanks very much for your replies

We were told at the meeting we went to that anything over 10% needed to be reported. However, I get the feeling (based on past experience with the trustee--allowed to skip several payments w/ no explanation (and tack on the end), etc.) that the trustee is pretty easy going as long as payments are being made.

I mentioned it to the paralegal several months ago and said I would said in some paycheck stubs, but I never got around to it. We need the extra money and I despise the thought of sending any extra in. Since I have tos end in my taxes anyway, I figure the trustee can see the increase and if they want more $$ they can ask me for it!!

Thanks again!

[tater71]

i'm in tx and under old law. our trustee told us to report any refund over 2K. As far as new jobs, we both landed better jobs and didn't tell bk. they don't check tax returns, so I didn't bother. now we're fostering kids and I'm staying home, so our income is about the same when we filed. My lawyer said as long as we made our payments on time, the trustee would leave us alone. and she pretty much has put the extra $$ savings and don't sweat it.

lori

[aa06a47]

I would report it to the trustee but generally, the way fuel prices have increased, etc., I'm sure unless it was a really big big raise, nothing in your plan would change.

To answer your question, your term would still last 38 months, and unsecured would probably get something. If the trustee was only worried about reducing your length of time in the plan, they would tell you to send in extra if you have it and get done sooner.

[wayne-o]

my attorney told me I only had to report raises of 10% or more and that since I was paying at least 20% back to my unsecureds I would be able to keep my tax refunds regardless of the amount. He handles a lot of bk's and he was on a first name basis with the trustee.

[southerncomfort]

Y'all are lucky that you get to keep your tax refunds!! I have to turn mine over to the trustee. Of course, the last two years I have had to pay, so it doesn't matter anyway!