Bonuses

[inajam37]

We filed Chapter 13 the end of last month. I recently got a promotion at work and will be making monthly bonuses. It could eventually make a sizeable difference to our income. Does anyone know if they normally take the full amount of the bonus and apply it to what we owe? I know obviously that they can...just wondered if anyone had been through a similar situation where it didn't turn out that way. Thanks for any and all info. This site is the very best about being informative.

[wooisme]

hmmm that's a hard one because if your making different bonuses every month i would imagine that it's going to be hard to calculate what they would want. i know with me i'm self employed and they took 6 months totals and divided it by 6 and came up with a figure saying now we know some months you will make more and some you will make less but the key is to save when you make more so that when you have a slow month you can use that income.

however in your case do you even know how much you would be making? do you have a lawyer? a good question to ask the lawyer

[Flamingo]

We filed Chapter 13 the end of last month. I recently got a promotion at work and will be making monthly bonuses. It could eventually make a sizeable difference to our income. Does anyone know if they normally take the full amount of the bonus and apply it to what we owe? I know obviously that they can...just wondered if anyone had been through a similar situation where it didn't turn out that way. Thanks for any and all info. This site is the very best about being informative.

I am replying to you with part of this posting and reaching out a bit with the rest. During a Chapter 13. the debtor(s) is required to disclose all disposable income or funds received during the course of that Plan. Your bonuses are extra funds over and above the amounts used in filing your Plan. We went through income increases, a large bonus and a large sum received from my former employer for back vacation and sick pay owed to me. I received the amount about two years into our Plan and I reported it to our attorney who consulted with the Trustee. Along with reporting it, I provided a listing of items that needed bad repair in our house, our computer was fried and my daughter was unable to do research for her school work, etc. We were able to keep the entire amount of the distribution which was over $3,000 after taxes. Our income increases were not high so we were never questioned by the Trustee after we submitted our tax returns each year.

The new law brought many crackdowns that were not present under the old law. Now tax returns are required to be provided to the Trustee each year during a Chapter 13 and all additional income or funds received during the Plan years is required to be reported. Before it was a state catch as catch can thing among the Trustees. I cannot stress to anyone in a Chapter 13 that I know how difficult it is to receive funds and not report them or try to want to hide them and keep them. After going through the stress of a Chapter 13 and coming out smelling like a rose by abiding by all the rules and following every request and order, to me it's not worth the risk of having your plan dismissed and getting cited for fraud. When you get any funds during your Plan (raises, bonuses, inheritances, lottery winnings, large monetary gifting from parents), let your attorney know and get an answer. Don't just think that because the attorney didn't get back to you that it is OK. Surprises can come way down the road. Get an answer. I am talking about larger sums; not the $20 grocery store gift card one may have received from a coworker for Xmas.

There has been a lot of talk about this recently so I am wondering if a lot of folks on here got Christmas bonuses and don't know how to handle them that are in Chapter 13. We reported it all and got to keep the majority.

Remember, the Trustee is in charge of your entire financial house during your Plan; from the day of filing to day of discharge. If you get extra money, report it but do as we did - send a listing along with your report (letter/email) as to things you may need or have repaired that those funds could cover.

[qwertysue]

I received a Christmas bonus, however it was almost equivalent to hours I was shorted earlier this fall when I was out sick for several weeks. In this case, this year at least, it won't spike up my annual earnings.

DH will get his bonus in February. His bonus last February was calculated when we ran numbers and was included in the 6 month previous salary when we filed (July). Again, it won't show as *additional income* because it's already in the total income, kwim?

[SANRA308]

My Husband Recieved A Bonus, However Never Accually Recieved It. The Company He Works For Sent It To The Trustee, Even Though Our Paper Work Says Nothing About Notifying Him Of Pay Increases, Bonuses Ect. The Trustee Requires Payroll Deduction, So I Guess My Husbands Job Just Took It Upon Themselves To Sent The Bonus To The Trustee Anyway

[Flamingo]

My Husband Recieved A Bonus, However Never Accually Recieved It. The Company He Works For Sent It To The Trustee, Even Though Our Paper Work Says Nothing About Notifying Him Of Pay Increases, Bonuses Ect. The Trustee Requires Payroll Deduction, So I Guess My Husbands Job Just Took It Upon Themselves To Sent The Bonus To The Trustee Anyway

There are probably instructions in the paperwork sent by the Trustee's office to his payroll dept. as to what to do with bonuses (taxable income) since your husband is having payments for your Plan withheld from his paychecks. That is something they would not just take upon themselves. Looks like Trustees in some areas may be ensuring they receive notification of bonuses by having those funds sent to them. Did your husband check with his payroll dept. as to why that occurred?

[MajorMike]

IT ALL DEPENDS ON YOUR DISTRICT AND TRUSTEE! Ours does not require us to send him our tax returns. He could care less. As long as we make our payments. Please don't mis-inform people by saying that trustees require them. It all depends on a lot of circumstances.

I am replying to you with part of this posting and reaching out a bit with the rest. During a Chapter 13. the debtor(s) is required to disclose all disposable income or funds received during the course of that Plan. Your bonuses are extra funds over and above the amounts used in filing your Plan. We went through income increases, a large bonus and a large sum received from my former employer for back vacation and sick pay owed to me. I received the amount about two years into our Plan and I reported it to our attorney who consulted with the Trustee. Along with reporting it, I provided a listing of items that needed bad repair in our house, our computer was fried and my daughter was unable to do research for her school work, etc. We were able to keep the entire amount of the distribution which was over $3,000 after taxes. Our income increases were not high so we were never questioned by the Trustee after we submitted our tax returns each year.

The new law brought many crackdowns that were not present under the old law. Now tax returns are required to be provided to the Trustee each year during a Chapter 13 and all additional income or funds received during the Plan years is required to be reported. Before it was a state catch as catch can thing among the Trustees. I cannot stress to anyone in a Chapter 13 that I know how difficult it is to receive funds and not report them or try to want to hide them and keep them. After going through the stress of a Chapter 13 and coming out smelling like a rose by abiding by all the rules and following every request and order, to me it's not worth the risk of having your plan dismissed and getting cited for fraud. When you get any funds during your Plan (raises, bonuses, inheritances, lottery winnings, large monetary gifting from parents), let your attorney know and get an answer. Don't just think that because the attorney didn't get back to you that it is OK. Surprises can come way down the road. Get an answer. I am talking about larger sums; not the $20 grocery store gift card one may have received from a coworker for Xmas.

There has been a lot of talk about this recently so I am wondering if a lot of folks on here got Christmas bonuses and don't know how to handle them that are in Chapter 13. We reported it all and got to keep the majority.

Remember, the Trustee is in charge of your entire financial house during your Plan; from the day of filing to day of discharge. If you get extra money, report it but do as we did - send a listing along with your report (letter/email) as to things you may need or have repaired that those funds could cover.

[Flamingo]

IT ALL DEPENDS ON YOUR DISTRICT AND TRUSTEE! Ours does not require us to send him our tax returns. He could care less. As long as we make our payments. Please don't mis-inform people by saying that trustees require them. It all depends on a lot of circumstances.

I was told by several BK attorneys in a neighboring law firm that handles BKs that the new BK law effective 10/05 requires those in Chapter 13 to submit tax returns each year during a certain time period after filing those returns to the Trustee. Prior to that it was a state or district requirement. Now whether or not the Trustee enforces that at this period of time I guess is up to the Trustee as it appears in your situation. So whether or not your Trustee requires you to send them in, all should realize that it is a requirement and you should ask your attorney whether or not you should provide those to your attorney on a yearly basis. We filed old law in 2002 and it was a rquirement that we mail those in to the Trustee each year within 5 days of filing. I am not misinforming folks. What happens to you may not occur with others and I always state to ask your attorney if you have any questions at all about your particular plan.

[SANRA308]

What We Were Told Is Pretty Much Anything Under $1000 Our Trustee Really Does Not Care, He Does Not Take The Tax Refund Either But Our Refund Was Figured Into Our Income $2400 Tax Refund Before We Filed Increase Our Monthly Disposable Income By $400 A Month. I Do Not Report Every Time My Income Is Slightly More Than What Was Figured. I Work Per Diem So Sometimes Its More, Sometimes Its Way Less We Just Try To Make Sure We Stay Around The $85000 Yaerly Income We Made When We Filed Give Or Take A Couple Of Thousand. We Also Get A Small Refund For Being Claim Free On Our Insurance I Never Reorted That Either Only $400 Especially Since We Payed More That Was Allowed Anyway

[MajorMike]

Spoke to my attorney today. Trustee does NOT want our tax returns.

I was told by several BK attorneys in a neighboring law firm that handles BKs that the new BK law effective 10/05 requires those in Chapter 13 to submit tax returns each year during a certain time period after filing those returns to the Trustee. Prior to that it was a state or district requirement. Now whether or not the Trustee enforces that at this period of time I guess is up to the Trustee as it appears in your situation. So whether or not your Trustee requires you to send them in, all should realize that it is a requirement and you should ask your attorney whether or not you should provide those to your attorney on a yearly basis. We filed old law in 2002 and it was a rquirement that we mail those in to the Trustee each year within 5 days of filing. I am not misinforming folks. What happens to you may not occur with others and I always state to ask your attorney if you have any questions at all about your particular plan.

[Flamingo]

Spoke to my attorney today. Trustee does NOT want our tax returns.

That's absolutely fine for you. That doesn't mean that others will not have to supply them to their Trustee who wants them. We had to supply ours every year during our Plan and so did/do others. That is they key - to ask and find out.

[MajorMike]

Exactly, Flamingo! It all depends on many things...your state, district, trustee, etc.