Big salary incr/buying a house in Ch 13

[tater71]

Newbie here and although I found LOTS of great info, I still have a couple of questions:

Hubby and I are in our 13 month of Ch 13, which was confirmed in Aug. Hubby got a great new job w/almost double his income that we used for the CH13. So we are looking to buy our first house. I know all about getting trustee approval and re-working our budget to justify the increase to pay a mortgage. Ok so here's my question: what if the trustee says "hey you're making more money now, so instead of buying house you should pay us more" ?? Do they do that ?? I pay $650 in rent now and want to buy something that will give us a mortgage payment around $1000. So it's not a huge increase in our spending, but like I said, our income has increased a lot.

thanks so much for any/all input !!

Lori

[Elf]

Yes, of course your trustee will want an increase in your payment!

It will be determined in the same manner that the original payment was determined. The trustee's job is not to make it easy for you to buy a house, or even rent a nicer one, unless you can justify the change. Did you recently adopt thee children after a family member died in a car crash? That might do it for you.

The trustee's job is to make sure that you're using income above what you need to pay off your creditors.

Where I live, any increase over 10% a year must be reported to the trustee so he/she can readjust the payment plan.

50%? Yup. You best report the increase and expect a jump in the monthly payment.

[Genenco]

Ok so here's my question: what if the trustee says "hey you're making more money now, so instead of buying house you should pay us more" ?? Do they do that ?? I pay $650 in rent now and want to buy something that will give us a mortgage payment around $1000. So it's not a huge increase in our spending, but like I said, our income has increased a lot.

thanks so much for any/all input !!

Lori

Frankly (IMHO) I'd go for the early payoff. I'd hit the Ch 13 with more money, faster payoff and then at the end of it, you shall be truly FREE...Plus, this also would show to prospective lenders you know how to budget, and when offered to pay the bills or buy a house, you choose the path of completion and THEN your personal enjoyment.

I know that personal ownership IS a worthwhile endeavor, but it makes no sense to burden yourself with that old "Yes, we can afford it, but what if...??"

Never think about tomorrow, today has enough problems

[tater71]

that's what i was afraid of. after working on the amended schedule J: they would be to take 1/2 of our income !!

[hhou812hh]

For most people (lately anyway) expenses seem to increase faster then paychecks.

tater71, since you have to report this extra income make sure you also report the extra gasoline, home heating/cooling, etc. you are paying so at least you don't have to give the whole increase to the trustee. All these expenses went up big time in the last 13 months so I'm sure the trustee will understand especially since you have no control of these costs.

Good luck!

[Elf]

Yup! And don't for get to add those expencise that come about when you're income goes up with a higher paying job.

Dry cleaning bills, dress clothes, mags and books that the job requires to keep you up to date-- they all add up.

[hhou812hh]

Yup! And don't for get to add those expencise that come about when you're income goes up with a higher paying job.

Dry cleaning bills, dress clothes, mags and books that the job requires to keep you up to date-- they all add up.

Very true! Even the IRS based expenses allow for this since it takes money to make money.

[tater71]

Y'all made me feel better!!

Thanks so much everyone !! You're right about the increase in spending. I forgot to add the $200 cell phone plan for hubby's new job. Plus, I had taken my school loan out of forbearance and started paying on that.

We're going through the house buying process anyway. if they raise the payment they raise it.

thanks so much for easing my mind a bit !!

[hhou812hh]

Thanks so much everyone !! You're right about the increase in spending. I forgot to add the $200 cell phone plan for hubby's new job. Plus, I had taken my school loan out of forbearance and started paying on that.

We're going through the house buying process anyway. if they raise the payment they raise it.
thanks so much for easing my mind a bit !!

Yeah, but don't you have to notify the trustee on this? You need permission to borrow any more money while under the plan from the trustee. If you go through with buying the house and the trustee wants more money due to the increase how will you be able to pay both? The last thing the trustee wants as the same with you is for the plan to fail.
This is all my opinion though. Your lawyer may best answer this for you.

Good luck!

[Lightning]

If he is required by his employer to pay $200 a month for a cell phone, then this should be documented by the employer in the offer. You can then present this to the trustee.

[tater71]

Yeah, but don't you have to notify the trustee on this? You need permission to borrow any more money while under the plan from the trustee. If you go through with buying the house and the trustee wants more money due to the increase how will you be able to pay both? The last thing the trustee wants as the same with you is for the plan to fail.
This is all my opinion though. Your lawyer may best answer this for you.

Good luck!

that's why all this has come to surface. I contacted the trustee about the process to get approved to buy a house. I'm hoping to keep my mortgage payments near my rent payments. (I can do that in the area I live in). So hoping that will help justify my wanting to buy vs. renting. So I have to amend my schedule and that's when I got worried about telling about the new job. The reality is we can afford to pay more. We have kept our cost of living to a minimal w/o accruing any other debt. So maybe this is a good thing and by paying more, we can get out of it sooner.

thanks !!

[tater71]

Yeah, but don't you have to notify the trustee on this? You need permission to borrow any more money while under the plan from the trustee. If you go through with buying the house and the trustee wants more money due to the increase how will you be able to pay both? The last thing the trustee wants as the same with you is for the plan to fail.
This is all my opinion though. Your lawyer may best answer this for you.

Good luck!

since my plan was confirmed in Aug, it was my understanding that my lawyer's job is done. So should I just ask the trustee these questions ?

[hhou812hh]

since my plan was confirmed in Aug, it was my understanding that my lawyer's job is done. So should I just ask the trustee these questions ?

That I couldn't answer. Not really familiar with being in a ch13 plan just yet.. Sorry...