Once your plan is in place, how can the payments change?

[tjs1970]

I have read about people who have said their plans have changed sometime during their chapter 13.

How does this happen?

If I were to receive bonus income, any type of gift of cash, or a new job that paid more than what I was making when the plan was approved, how would the trustee know if no one told them?

I dont mean to come across as shady or trying to get away with something illegal, but is there a way for the trustee to find out about things such as this? Do they audit your bank accounts at any point in time?

What if you had assets or a bank account at the time of the 341 that you didnt list? How do they know? Do they check?

Like I said, this is something I have wondered about and of course I would not want to commit a federal crime of any sort as my life is difficult enough as it is right now, but seriously........how would they find out?

[AngelinaCat]

You are obligated to report any change in your financial status to your attoney imediately so that any changes that need to be made can be done to your plan. It is my understanding from reading posts from Ch13 filers, that far more check and balances are conducted throuhout the life of a 13 plan, though I am not familiar with the details.

Sooner or later, justbroke and others will be checking in and will add their opinions.

[vicmost]

My attorney in So Cal stated that once your plan is approved they only look at your annual taxes (of which you have to file with the trustee). In his 20 years of experience he has never had a trustee change the plan unless the income increase was significant. He stated that the Trustee just doesn't have the time. Your income may change but so would your expenses. It's just not worth their time unless the gain to them is significant...Just avoid winning lottery tickets and large inheritances...Your mileage may vary depending on your district...On the other hand I've read that some plans get scrutinized on a regular basis...I think Just Broke has some disputed amounts...I feel sorry for his Trustee though, he has become quite knowledgeable in the BK process...If he was in jail they would call him a Jail House Lawyer!

[tjs1970]

If I file with my wife and our income is calculated between her full time job and my unemployment income, and I get my real estate license and sell a property or two, will I have to now have that lump sum income figured in? As most know, real estate commissions are something that are sporadic and not a continuous income stream........in this market, I doubt it will be awhile before I am able to get a sale, but do have a family member that would use me to list their house in about 6 months or so when they are ready and I could get income when that sells.........

[justbroke]

Nothing really to add with what Mrs. Cat (AngelinaCat) and vicmost wrote. There are some things that are too District/Trustee dependent that we can only offer what happens in our District(s).

What if you had assets or a bank account at the time of the 341 that you didnt list? How do they know? Do they check?

I am unsure to what extent Chapter 13 Trustees do asset checks involving detailed diligence around what's actually in your name nad held in accounts. A Chapter 13 is treated differently than a Chapter 7 because in a Chapter 13, there's a potential that unsecured creditors could receive a substantial payback. Not only that, even in a 0% payback plan, there's the potential that tax refunds and other unanticipated cash in excess of the debtor's disposable monthly income (DMI) may come in and provide even greater payback to the unsecured creditors. And, this is for years (3 to 5 years). This is something that doesn't happen in a Chapter 7!

I must say, that I expected at least one complaint on dischargeability, but as I learned, unsecured creditors are a little bit more lax in a Chapter 13 because of what I wrote above.

Having wrote all that... if you constructively tried to hide things from the Trustee and they find out later... you could end up with a dismissal with prejudice. I mean the type of dismissal where you're never allowed to discharge the debts you attempted to discharge in that bankruptcy... ever.

While all Trustee are not created equal, many do require Tax Returns. A tax return opens the door to a lot of things. From the tax return, one can readily determine your employment income, as well as unearned income from dividends and interest earned on accounts. If the "smart" Trustee sees large unearned income amounts, that could clue them into the fact that you have money somewhere that you didn't report. I'm not saying that all Trustees are that smart or sophisticated... but I wouldn't put it past them should they randomly audit debtors and come across one.

Should you come into a windfall, inherit a bunch of money, win the lottery, or get a substantial increase in pay (> 10%), contact your attorney and work with that attorney.