top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Significant pay increase

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Significant pay increase

    In March I will enter my 4 years in chapter 13. This year has been crazy for me in all means. I worked so many overtime to only realize that on this year tax return I will be making double of what I made in the previous year.

    so when I file my tax in April it will be obvious to the trustee that I’m making 150k more. However I will be making probably less next year due to less overtime.

    anyone been in this situation before? Are the trustee usually easier in the last year of ch13 plan?

    if he decide to increase the payment can they go back and demand that I pay back the money I earned?


    #2
    Difficult question; my understanding is any bump in income above roughly 10% will attract the attention of the Trustee. I would contact your attorney and get in front of this as quickly as possible.
    Latent car nut.

    Comment


      #3
      Ya I did talk to my attorney and he said that it is significant increase more than 100% but he also said to wait until I file my tax return and see how the trustee will react. He said hard to predict but at least he said they can’t really go back in time to collect. So for me it will be my last year so hope will pass thru it without issue

      Comment


        #4
        If your confirmation is like mine and didn't mention anything about notifying trustee of employment changes and income increases, I think they can't go backwards or dismiss your case. My lawyer said not a single case has resulted in a plan payment increase over several decades of chapter 13 practice due to income. But then again nobody has ever won the lottery jackpot either.

        Comment


          #5
          When I got a significant pay bump in my fourth year I contacted my attorney and she said, she'd seen "a few" instances where the Trustee asked for more money, but the extra income was way beyond what I got. That said, I'm thinking a $150,000 increase in income, even if for only a year, would definitely be of interest to the Trustee.
          Latent car nut.

          Comment


            #6
            My confirmation letter say tax refund, future bonuses, commissions, profit sharing or other funding.

            so not sure where overtime or income increase fits in the above because it isn’t really a bonus or commission.

            That what now makes me wonder if it was wise from me to except the overtime work. But it helped my family so it is like a gamble. Will see what will happen in April.

            Comment


              #7
              Moses911, in our case my husband was laid off in January 2019, collected severance pay for three and a half months until the end of April, started work at a another company towards the end of February, and got his first check near the middle of March , thereby collecting "double pay" for about two months. We informed the attorney and nothing happened. My husband received an increase of approx. 16k initially , and later in the year received a "market analysis" raise of another 4K . Again nothing happened .
              However, In July 2020, the trustee requested the 2019 tax return and my husband's latest pay stub. He then filed a motion to double the payment! Our lawyer too was shocked, saying this trustee had never modified any of his client's payment plans before . Of course , we objected and after my husband received another yearly "market analysis "increase of around 5k, the trustee had to "settle" for an increase of $371 instead of more than $600 per month. We are not sure how much we will owe the lawyer, that will come later.
              My husband just paid off his car this month, and found out later our life insurance through his company will increase by more than $200 in January. So we will have less money to work with in 2021.
              Our plan is supposed to end in Feb.2022, but the trustee could demand another huge increase next year or at the conclusion - and refuse us a discharge then - who knows?
              Based on our experience , you may well have a huge plan payment increase ahead, but your state , circumstances etc. are different, so maybe nothing will happen at all.
              Good luck!

              Comment


                #8
                Looks like we have same date mine will finish in March 2022. So I’m only worried for 2020 tax return. It seems ch13 only designed to reject any pay raises or extra money for it to work.

                I have to note in my year 2 in ch13 I got 18% raise and the trustee didn’t demand any of it. Although we do send the yearly return.
                but this year is different story and it isn’t 18%

                Comment


                  #9
                  Chapter 13 Trustees are fickle and hard to read. There's no magic formula but we do like to use the 10% as a barometer of what would start to pique the Trustee's curiosity. In some districts, the Trustees don't care how much more you make; they only care about the original plan. Yet in others, the Trustees clearly throw out the "Motion to Modify" if they even smell more money.

                  Your mileage may vary.
                  Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                  Status: (Auto) Discharged and Closed! 5/10
                  Visit My BKForum Blog: justbroke's Blog

                  I am not an attorney. Any advice provided is not legal advice.

                  Comment

                  bottom Ad Widget

                  Collapse
                  Working...
                  X