Big pay increase makes for some questions...

[Hand2mouth]

[lrprn]

Is there such a thing as a payment ceiling, or is it all of your disposable income?

It's all of your disposable income. However, remember that since you will be living in a foreign country, your expenses are going to change radically also.

If that holds true, can I reasonably expect my monthly payments to shoot up to about 6-9K a month? Also, can I reasonably expect my payment percentage to go from 28% to 100% because of such a large increase in income?

Impossible to say. Everything depends on how your trustee treats large income increases like yours when you are in Ch 13. Frankly some trustees don't care how much more you make as long as you keep making your original payments. Others will petition the court to increase your payments via an amended plan to increase your monthly payment and % paid to creditors accordingly to match your new level of disposable income.

Your lawyer should be able to give you some insights about what to expect. Have you discussed this large salary increase with him/her yet?

Would the trustee require I establish some kind of automatic deduction, preferably from my bank, rather than my job, because of the possible amount?

Again, depends on your trustee. Ask your lawyer what to expect.

If you just start sending in bigger payments, it will NOT reduce the number of payments you make. The extra just goes to your creditors, increasing their payback %. Also the trustee will be aware that you do have more disposable income and is likely to start sniffing around trying to get more for your creditors....that's the trustee's job.

Always very bad advice to hold ANYTHING back from your lawyer. Allow your lawyer to do his/her job - as I already recommended, call him/her immediately to discuss the possible impact of this new job on your Ch 13 plan payments. Your lawyer can advise you about how to proceed with your trustee.

[Hand2mouth]

Thanks for the info.

I have not talked to my attorney yet for no other reason than finding out yesterday that it still will be a while before I actually start with the new company due to the high number of military personnel heading overseas. They have first priority at the personnel processing points. Military contractors are a distant second. It may be Christmas or even around New Years before I see any kind of pay from them. I'll just keep plugging along.

H2M

[Boscoe]

H2M - My attorney told me that due to the overworked and understaffed bk offices around the country, many trustees simply do not have the time to follow up each year with all the chap 13 cases.

Her advice was to stay under the radar. Answer any questions about income truthfully, but don't offer up anything unless specifically asked. If you are asked, I would not state the extra income unless you were asked after your paychecks actually started reflecting the larger $.

Also, if you are in a 100% payback plan, that is about the max you can pay. So, the only increases you would have would be to pay back the remaining amounts your plan calls for. Maybe you could even pay it off early.....

But I would do nothing at this point - you are not actually making the extra cash yet. And as lrprn says, you may not even be asked, not now, not ever.........

[BKOnce]

Iraq pays the most... and die the fastest...

[BKOnce]

Iraq pays the most... and die the fastest...

[Hand2mouth]

The point about the overworked/understaffed bk offices rings true. If I recall correctly, I'm supposed to send in my tax return each year, but I haven't (never remember to since I always owe anyway) I haven't missed a payment yet, so I guess since I'm being a good little bk'er, I don't come up on their "check into" list. Also, I have not heard anything from my attorney in over 2 years, but I suspect I haven't given her or the trustee any reason to contact me if everything with my account is in order.

Thing is, I'm not on a 100% plan, just a 28% plan. Well, I only have 13 more payments. Since I'll be out of the country, it will be easier to stay under the radar.

H2M

[woeisme]

I think since you only have 13 more payments, you'll stay under the radar. You say you won't go to this new job until Dec/Jan, so when you file taxes it will be based on 2007 income, so shouldn't even show up, and you'll have your payments done and be ready for a discharge before having to ever file 2008 tax returns, especially if you wait until the April 15, 2009 deadline. So I'd keep paying as normal, doesn't sound like your trustee is ever going to be aware of your new income (if it does come through) because you will be discharged before it shows up on a tax return in 2009. Hoping you stay safe!

[jane taylor]

My attorney says to stay under the radar. We have never missed a payment although we did have to amend our plan once for extreme medical expenses.

[wooisme]

I find this very interesting. I would have never known about increased income at all if it weren't for this forum.......i have nothing in writing, nor from the lawyer saying this or from the trustees handbook about increased income and reporting it. My booklet only says to report if you change jobs, change addresses, etc. and about taxes, they don't even say to send it in every year.......they say to have it on hand IF the trustee asks for it.

So, if the booklet he gives you doesn't address increased income and your attorney doesn't say anything either then how can they hold you accountable for it when they don't specify it in their (trustees) booklet and instructions.......I mean couldn't that factor be an argument?

[rrockinggramma]

I wouldn't be too sure about the tax returns however. Before you receive your discharge, a final audit will be conducted. If there are no tax returns in your file, you will run into discharge trouble, even if you have made all your payments. If you really want to fly under the radar, then send in your tax returns as requested.

[wooisme]

I find this very interesting. I would have never known about increased income at all if it weren't for this forum.......i have nothing in writing, nor from the lawyer saying this or from the trustees handbook about increased income and reporting it. My booklet only says to report if you change jobs, change addresses, etc. and about taxes, they don't even say to send it in every year.......they say to have it on hand IF the trustee asks for it.

So, if the booklet he gives you doesn't address increased income and your attorney doesn't say anything either then how can they hold you accountable for it when they don't specify it in their (trustees) booklet and instructions.......I mean couldn't that factor be an argument?

they have not asked for it they have not requested 2006 and as far as increased income, there is nothing in their books that even address reporting increased income and nothing was said about that at all from the lawyer...one would think that if this was very important they would have that in bold.....report all increased income!