Income Increase Received After 341 Meeting

[Tahoe07]

My 341 Meeting is set for August 4th, and I'm just curious about how they handle an income increase after being confirmed. A friend of mine has almost completed his Chapter 13 plan and he said that not once during his 60 month plan did they ever ask for his tax returns. I make about $62,000 a year and my plan payment takes $541.85 out of each bi-monthly check which leaves me $750.00 every 2 weeks. About 6 months ago my company cut our working hrs from 160 hrs per month down to 144 hrs per month. In about 2 more months I heard we were going to be going back to a full 40 hours every week. Looks like it's going to work out good for me if they do not know about this before I get confirmed. If it works out this way, I will have about $960.00 every 2 weeks instead of $750.00 I also get a yearly service bonus of $1000.00 every March and we also get 3 EVA bonus checks per year. My question is....will they ask to see my pay-stubs every so often or will they request my tax returns so they can increase my monthy payment amount ? Can they increased my monthy payment after I get confirmed or do they have to stay with the original amount ? Any response would be greatly appreciated. Thanks in Advance.

[Billssuck]

Oh we're in the same boat. I just got confirmed on 7/14 and I found out on 7/18 that I will most likely get a full-time position in January making $2,000 - $2,500 more per month. From what I have been told, I have to report the increase (once I get a pay stub showing the new amount) to my trustee via my lawyer. They will recalculate my payment (increasing it of course) but I will get to fill out a new Sched J (expenses) to increase those as well (for me, higher babysitting costs, fuel, etc.). So the extra money must be reported or we could get dismissed.

I just got my confirmation letter from the court a couple of days ago and no where in it does it state that I must mail in a copy of my tax return each year. The letter gives alot of cans and can nots and it doesn't state anything about the tax return. However, I do plan on reporting the increase (WHEN it happens, no sooner...somebody might change their mind about retiring at the 11th hour) so that I don't get dismissed. The letter did state that all disposable income is to be paid to the trustee during the plan period.

My biggest question is if I will have to go from a 3 year plan to a 5 year plan? I sure hope not but time will tell.

Good luck to you and I hope everything works out for you to the best scenario.

[Tahoe07]

I guess I figure because the income increase is not that much that I probably shouldn't really say anything or even let them know about it unless they ask.

[Billssuck]

The rule in our district is that we have to report an increase that is 10 percent or more of our current income. So you say your income is $62K. If you have the same rule (and I don't know if this is true for you in your district), 10 percent would be a $6,200 increase, annually and you would have report that increased amount or higher. I will definitely exceed 10 percent so I have to report it...

[Tahoe07]

Where did you find the rule for your district about the 10% increase ? I live in Western Michigan. I wonder what the rule is for my district. Any ideas or should I just ask my attorney ?

[newbie2]

As always, cover your behind. Inform your attorney when you have an increase in income and let him/her decide whether the increase is something that they think the trustee (or judge) would be interested in.

We have to turn in our tax returns each year (and refunds) to the trustee. One year when my husband received a raise we sent a letter (registered) to our attorney with the new updated paystub. The attorney looked it over and said we didn't have to worry about it.

Then, months later, when the trustee received our income tax returns clearly showing the increase in income I wasn't worried. I knew our behinds were covered with the letter to our attorney informing her about it months prior.

As it was the trustee didn't question it, but I felt better knowing we are complying completely with the bankruptcy rules.

[aa06a47]

Along with the thousands of new bk filings the trustee office deals with each year, I do not know how much they really look over the income tax return. I imagine it is on a random audit basis. I sent mine to my attorney via e-mail, paid in the refund, but never even heard a confirmation that they received it.

[Billssuck]

Where did you find the rule for your district about the 10% increase ? I live in Western Michigan. I wonder what the rule is for my district. Any ideas or should I just ask my attorney ?

Our attorney told us during our consult appointment, then again when we filed, and then the trustee told us during our 341.

[Tahoe07]

As always, cover your behind. Inform your attorney when you have an increase in income and let him/her decide whether the increase is something that they think the trustee (or judge) would be interested in.

We have to turn in our tax returns each year (and refunds) to the trustee. One year when my husband received a raise we sent a letter (registered) to our attorney with the new updated paystub. The attorney looked it over and said we didn't have to worry about it.

Then, months later, when the trustee received our income tax returns clearly showing the increase in income I wasn't worried. I knew our behinds were covered with the letter to our attorney informing her about it months prior.

As it was the trustee didn't question it, but I felt better knowing we are complying completely with the bankruptcy rules.

Your right, might be better to let them know of the increase, no matter how small or large and let them decide, just to be safe, I'd hate to have my case dismissed over something stupid that would totally be my fault. Thanks for your response.