Increase in Salary

[mgk3378]

What happens in a Chapter 13, if after filing that my salary increase more than 10-20%? Do they review your budget every year? Do they have you submit your tax forms every year?
THanks, MGK

[HHM]

There is a risk that the trustee can move to modify your plan to increase your plan payment (its rare, but they have the legal right to do so). Many trustees will have you submit your tax returns each year during the plan and if they see a 15% + increase in income, there is a substantial risk of having a plan amendment filed. On the other hand, many trustees simply accept the plan and don't really care what happens after that.

[mgk3378]

So, if I find a new job or get paid more, the trustee amy or may not request a rebudget? Would they ever extend the plan timeframe or % pay-off? If so, under what circumstances?

Thanks

[HHM]

Yes, they could redo the budget. No, they cannot extend the term. If they up the plan payment because of increased income, then naturally your % pay-off would change.

[jane taylor]

We had several salary increases during our 13 and I always notified our attorney immediately and documented that I did so. Our trustee never questioned anything as we made our payments like clockwork. Our attorney says that most Trustees do not care after the Plan is confirmed and they receive payments.

I would just run things by your attorney for your own peace of mind.

Good luck!

jane

[sassiebaz]

When I had my consultation, I was told that in our area the trustee could care less what we do when we walk out of our 341 meeting. As long as we are making our payments and doing what we are supposed to do, they shouldn't question anything. Well unless we won the lottery or something!

[HHM]

When I had my consultation, I was told that in our area the trustee could care less what we do when we walk out of our 341 meeting. As long as we are making our payments and doing what we are supposed to do, they shouldn't question anything. Well unless we won the lottery or something!

And that is generally the case. Most trustees don't care...but from a strictly legal standpoint, you need to go in with your eyes open and realize the trustees have the right to modify the payment if they see an increase in income. But as a practical matter, they do not give post confirmation cases much oversite.

[optimistic1]

My attorney told me that he would be surprised if the Trustee office even looked at my tax returns, they just want that payment. I live in AZ, btw.

[Flamingo]

What happens in a Chapter 13, if after filing that my salary increase more than 10-20%? Do they review your budget every year? Do they have you submit your tax forms every year?
THanks, MGK

Something is going to occur during a Chapter 13 regarding finances...either a job change with a big salary increase, a bonus (or several), an inheritance, a big raise or least likely, a lottery win. On the other side it could be the complete opposite and you have a big loss of income. People are really quick to report the loss of income but will do everything to avoid letting the attorney or trustee know they have increased income which is required to be reported. The "best" thing to do at the start of one's BK is to ask your attorney what you should do in your particular situation. Find out what the trustee may be looking for if you get a raise or bonus that is large. Most don't worry about smaller raises or bonuses. Inheritances, stock awards, big bonuses and lottery wins are a must report. Many people are required to submit state and federal tax returns within a certain time period after filing - we had to submit ours within five days of filing. I am a firm believer in "CYA" - "Cover Your A**." By speaking with your attorney before something actually happens, you will know what to do and have the right advice and can avoid any issues with the Trustee. If you go into a Chapter 13 and think that nothing can happen to you because it doesn't happen to anyone else, you can be in for a big surprise. The less you try to hide from your attorney and trustee the better your chances are of a successful Chapter 13 Plan.

[Kingxray]

Not trying to rob this thread but what does it mean to be "confirmed" (other than in the catholic religion, ha)? Thanks.

[sassiebaz]

And that is generally the case. Most trustees don't care...but from a strictly legal standpoint, you need to go in with your eyes open and realize the trustees have the right to modify the payment if they see an increase in income. But as a practical matter, they do not give post confirmation cases much oversite.

Of course! You always have prepare yourself for anything!

[wooisme]

if your confirmed what does it say in your papers...........sometimes they stamp on there to report extra income, etc and so forth and sometimes they tell you to turn over all income tax returns....

mine doesn't say any of that......there's nothing in the documents that says I have to send in tax forms UNLESS asked for (that was in the handbook) and they don't ask for income raises (not on confirmed papers nor in their handbook).

All my papers said was that I could acquire property up to $5,000 or sell property up to $5,000 without court permission and that I could not visit the trustee in person without my lawyer and who the hell would want to see him anyway.

If they don't ask for your tax return i wouldn't send it..........if they ask for it, send it. if it says on your confirmation papers to send it then you better send it.

then again I am self employed and have to make estimated payments which i do send a copy to my lawyer (who shoves it into a file and i guarantee the trustee never sees it) any extra money I made of any increase I threw back into my business in advertising expenses and stuff needed to run my business...after all you have to spend money to make money esp today.

Not that I'm at a point to give any legal advice since I'm not a lawyer but really don't you think that the trustees and their offices are swamped with so many chapter 13 cases right now, I guarantee you they can't even keep up with what they have right now and it's going to get worse.

[Flamingo]

if your confirmed what does it say in your papers...........sometimes they stamp on there to report extra income, etc and so forth and sometimes they tell you to turn over all income tax returns....

mine doesn't say any of that......there's nothing in the documents that says I have to send in tax forms UNLESS asked for (that was in the handbook) and they don't ask for income raises (not on confirmed papers nor in their handbook).

All my papers said was that I could acquire property up to $5,000 or sell property up to $5,000 without court permission and that I could not visit the trustee in person without my lawyer and who the hell would want to see him anyway.

If they don't ask for your tax return i wouldn't send it..........if they ask for it, send it. if it says on your confirmation papers to send it then you better send it.

then again I am self employed and have to make estimated payments which i do send a copy to my lawyer (who shoves it into a file and i guarantee the trustee never sees it) any extra money I made of any increase I threw back into my business in advertising expenses and stuff needed to run my business...after all you have to spend money to make money esp today.

Not that I'm at a point to give any legal advice since I'm not a lawyer but really don't you think that the trustees and their offices are swamped with so many chapter 13 cases right now, I guarantee you they can't even keep up with what they have right now and it's going to get worse.

The forum is full of posters who get the shock of having the trustee ask for information they thought they did not have to provide. Anytime during your Plan the Trustee can ask for any documentation he/she wants if they want to check on on things; you are correct - that may not occur that often but you never know what can happen to you personally in your own Plan/situation. While Trustees may be swamped with filings, they do increase their staff to assist them. I would not take anything for granted as to anything financial during Chapter 13 years and when anything financial arises, check with one's attorney to "CYA." Just like the handbook stated - "if asked." The trustee could ask for your tax returns mid-Plan when you least expect it and all increases in income or 401(k) withdrawals or anything you did during your Plan will be right there. Complying, asking the attorney questions and laying low during the Plan years get you through.

[wooisme]

WEll my lawyer doesn't want to hear it. He returns NO phone calls, nor will he answer emails with questions and yes they can ask for anything during that time period I'm not a dope.

[Flamingo]

WEll my lawyer doesn't want to hear it. He returns NO phone calls, nor will he answer emails with questions and yes they can ask for anything during that time period I'm not a dope.

I'm sorry - I didn't mean for my posting to be judgmental to you or make you feel that way - I tried to direct it more to anyone reading it that was in Chapter 13. I should have been more specific as it was not directed to you but more in response to what you were saying to apply to everyone in a 13.