Tiny holiday bonus - does it need to go to trustee?

[Lesa13]

Hi everyone. My chapter 13 was filed the day before Thanksgiving. My payment to the court is more than reasonable and I am very happy with my attorney.

However, we are having a little bit of a disagreement.

My office sometimes gives us "holiday bonuses". These are not guaranteed and are taxed at the "bonus level" which is something like 45%. The bonus is included in our tax stuff for the year and is paid as a live check the same way we get a paycheck. It is considered part of our yearly income.

The bonus is NEVER more than $500 and that would be for a really "good" year. Generally, any bonuses I have had with this company have been in the $200 range.

My attorney says that I should plan on giving 1/2 of whatever I get to the trustee. I say that since this is part of my annual income and is included in my 1099 and is also not guaranteed, I should be able to keep it. It isn't like it is extra money the trustee would not be aware of. It would show as part of my yearly income.

Thoughts? It's not enough money for me to get super upset about if I do have to give 1/2 to the trustee but give me a break, I just can't imagine $200 is going to make a huge difference.

Concerning income overall, my attorney also told me that our yearly raises are so small, I don't need to tell them about that either. He said that he was only interested in "large increases" and (I would suppose) "large bonuses".

Opinions? Thoughts? Thank you and hope everyone is having an enjoyable (or at least not depressing) holiday season.

[jmac]

Im not giving advice just telling you my situation, i got a few bonuses and i keep them and quite a few pay increases along my 5 year road to recovery and never said anything to my trustee, all tax refunds went to trustee though, my lawyer told me he get's your tax returns it not up to you to notify him about anything he will decide if he finds it to ask for it.

[lvmilizia]

I am not giving advice either but I agree with jmac. In my case I get a large bonus in March most years, and we had to disclose this, and it is not figured into my month payment, but in March when I get the bonus I have to go get a check made out to the trustee for the net of tax amount of the bonus and send it to them. Makes me cry.

[Lesa13]

Thank you both - good points. I wonder if our payroll department will send the bonus check (it is a live check after all) to the trustee? As you are saying, the trustee gets all the tax returns so they would know. I think I'll keep it on the DL and see if my attorney brings it up. We haven't even had the first meeting yet. By that point, the trustee will have 1 1/2 months worth of payments so maybe he will look upon me a little favorably. My attorney did say that the trustees prefer doing the payroll deduction through your employer and that they tend to be more "flexible" in those situations.

My attorney did say that here in Missouri we are allowed up to a $1200 refund before we have to give anything over. Since I've never gotten anywhere close to that much back, I'm not really worried about that. Guess that's one "benefit" of being somewhat poor!

Thanks for the input!

[dmc-2008]

My atty said not unless its like 10%

[LadyInTheRed]

A trustee can technically get every bit of your bonus if bonuses weren't included in calculating your disposable income, assuming you have no increase in expenses to offset it. Somebody here tells you they were able to keep their bonus, doesn't mean you will be able to keep yours. Your attorney knows your trustee and your case. If your attorney tells you to expect to turn over 50% of your bonus, then expect to turn over 50% of your bonus. If your attorney tells you you need to inform the trustee of your bonus, then tell your attorney when you get a bonus so that he can report it to your trustee. If your attorney is wrong and you get to keep your bonus, great!

If your payments are made through payroll deduction, your employer will send exactly your monthly payment and change it only if ordered by the court to do so. If you have to pay part of a bonus to the trustee, you will probably have to make that payment directly.

[May2014]

Lesa, I'm in Missouri as well. We are required to turn over 1/2 of all bonuses. I think it's unfair because those bonuses were already figured into the 6 months of income, so they're really double-dipping. BUT I don't need that money enough to jeopardize my 13, so I pay it and keep my mouth shut. Plus, that bonus money seems to put us back into the "feasible" plan, so it's all good. I "think" we get to keep all tax money up to $1500 then pay half of what's left. For some reason, I can't find those particular instructions and was going off of memory. We never get more than $1200, though, so I think it will be ok.