Throttle back OT in preperation for Chap 13?

[Mark80]

I'm lucky to have a job that allows me to put in a ton of OT hours. Over the years of mounting debt I have slowly ramped up my OT to try and keep my head above water. Problem is I am up around 70 hours a week now and its getting exhausting! Since I plan to file in the fall after my final and last child is born I was wondering if I should start to allow myself to fall behind on things in order to not work so much OT. I would hate for them to lock me in on my plan over 5 years taking into effect that I have to work 70 hours a week! I just don't think I could keep up with that work pace. I know it sounds insane to stop paying half my bills, but I am really worried about being trapped into my hours.

Thanks

[Flamingo]

Two problems that I see that can occur as to your situation. When we filed for Chapter 13, we had to provide a full year of paystubs, checking, savings and other account information and had to explain deposits and checks written/withdrawals in excess of a certain amount (i.e. $1,000 to $500). We also had to provide our previous tax returns, both state and federal and provide them every year after filing. If your income takes a big dip just before filing, it can easily be discovered and you may be questioned as to why that occurred at that time. Also, you may be required after you file to inform your trustee via your attorney with any and all increase in income and extra funds received over the amount of your income at the time of filing. Let's just say it would not look good to lower your income on purpose prior to filing and then go back to the overtime after filing. You may also be required to provide your tax returns each year to your Trustee after filing which would show everything,

Hour fluction on your job is something you would need to discuss with your attorney prior to filing. Plus, if you cut your hours and reduce your income and then have a child, you might be able to file a Chapter 7 instead of a 13 - I suggest consulting with an attorney regarding your situation so you can determine your financial situation and what you should continue to do or not do. Best of luck to you!

[Mark80]

That makes sense. I do not want to lose my home and auto, plus I make more then the median income as it is. I am almost positive I will have a 100% chapter 13 payback plan. Not to derail the subject but I noticed on your sig you got an early buy out!? I thought you couldn't do that in chapter 13?

Thanks for the response!

[Cali]

So even if the OP is working OT(which isn't the OP's normal work week), they can say something about difference in income if they stopped working the OT? I don't get that, mind you I haven't had my coffee yet either. LOL

Two problems that I see that can occur as to your situation. When we filed for Chapter 13, we had to provide a full year of paystubs, checking, savings and other account information and had to explain deposits and checks written/withdrawals in excess of a certain amount (i.e. $1,000 to $500). We also had to provide our previous tax returns, both state and federal and provide them every year after filing. If your income takes a big dip just before filing, it can easily be discovered and you may be questioned as to why that occurred at that time. Also, you may be required after you file to inform your trustee via your attorney with any and all increase in income and extra funds received over the amount of your income at the time of filing. Let's just say it would not look good to lower your income on purpose prior to filing and then go back to the overtime after filing. You may also be required to provide your tax returns each year to your Trustee after filing which would show everything,

Hour fluction on your job is something you would need to discuss with your attorney prior to filing. Plus, if you cut your hours and reduce your income and then have a child, you might be able to file a Chapter 7 instead of a 13 - I suggest consulting with an attorney regarding your situation so you can determine your financial situation and what you should continue to do or not do. Best of luck to you!

[Flamingo]

That makes sense. I do not want to lose my home and auto, plus I make more then the median income as it is. I am almost positive I will have a 100% chapter 13 payback plan. Not to derail the subject but I noticed on your sig you got an early buy out!? I thought you couldn't do that in chapter 13?

Thanks for the response!

Note - we were Old Law. Under the old law (no one has yet to pass the 36 month mark in a Chapter 13 under the new law - we are all waiting for that on here), when you passed the 36 month mark in your Plan (our Plan was for 5 years), and you were able to buy out (say if you had lots of equity in your house) and really needed to buy out of your Plan (in our case we severely needed a new roof that would not last two more years), steps could be taken to buy out early of a Plan. We refinanced to buy out as we had enough equity to do so and also get major house repairs done.

After October, folks who filed under the new law and may be attempting to buy out hopefully will post their experiences on here so others who may be in that position can learn from that.

[Mark80]

Ok I got ya! Thanks!

[Flamingo]

So even if the OP is working OT(which isn't the OP's normal work week), they can say something about difference in income if they stopped working the OT? I don't get that, mind you I haven't had my coffee yet either. LOL

If the OP has been working extra time for a while prior to filing and then just stops working OT prior to filing, you can be sure a red flag will be raised, especially if the income increases again after filing. He will probably need to be ready to justify the changes with a possible letter from his employer that his job OT was cut due to company cutbacks or some other reason and he is back to working regular hours with no OT. In any event, it just will not look good without a good reason (I think he knows that) and he should discuss the problems as to any monetary fluctuations with an attorney to protect himself so there will be no issues on filing.

[woeisme]

In any event, it just will not look good without a good reason

I think the poster has a perfectly good reason, his wife is having a baby and he will need to spend more time at home with the newborn. Right now he needs to spend more time with his pregnant wife, who he could argue needs him to be home more than a 70+ hour workweek would allow.

I've read of posters on here who have been told by their trustee that they could quit a parttime job so that their income drops low enough to file a CH 7 instead of 13, no trustee can force a filer to work ridiculously high numbers of hours to fund their plan.

I do agree that if the hours go back up after you file your 13 then you could have a problem though. Some trustees will want tax returns and if they see you working a lot of overtime after the plan was based on no overtime, they could ask for the extra income, so check with your lawyer to find out what your local trustee's practices are as far as overtime and extra income are concerned.

[woeisme]

I forgot to mention that the stress affecting you from working 70+ hours a week is another valid reason for dropping the overtime. Just combine that with the new child, and there is every reason in the world for you to let the bills go now so that you can file a reasonable plan that you can live with for 5 years, instead of an insanely inflated plan that would require you to work 70+ hours of overtime for the next 60 months to fund!