Income Increase after CH 13 Plan

[momofthree]

From my understanding, the great majority of plans that "never make it thru a 13" are those who convert to a chapter 7 due to a change in circumstances.

[ABC]

I love the term "extra income".

I have no savings, no rainy day money, no fluff.

Isn't it prudent for a trustee to allow someone to put some money away to make a 13 successful ? Otherwise what's the point if you'll fail.

BTW, my attorney made it clear. I can keep my tax refund as long as it's not over $10,000 and also any income increase less than than shouldn't be an issue. Must vary by region, court, and trustee.

For now , I am claiming a high exemption, paying any bills early , and any left over is going in a shoebox for the rainy season.

[Universal]

I think the plan your attorney has offered up also can make a difference. Not only district specific, trustee specific, but also plan specific. Under our plan we do have to forward copies of tax returns each year, but with our plan when hubby starts drawing his retirement we do not have to offer up that money. I quizzed our attorney about that several times over.

[lcnm]

Doesn't work that way...any extra income would be distributed to creditors over and above the confirmed percentage. Does not shorten one's confirmed plan.

Correct me if im thinking wrong. If you are on a 100% repay (as I am), if they do take any extra bonuses, etc that I would get, then I would be done sooner, right.

I'm on a 100% repay in 56 months. My attorney thinks that as things stand right now, im probably looking more like 40 months to complete without any additional other than tax refunds, which I doubt I'll have any way. last years refund was the same as my prep fees, and I doutb i'll get any refund the next few years now that I don't get the deductions for our house, and no longer get to deduct for certain work related travel expences (changed jobs, non-qualifying now).

[usmccop]

You're correct if you're a 100% repay. You can pay it off early and get out based on that.

Correct me if im thinking wrong. If you are on a 100% repay (as I am), if they do take any extra bonuses, etc that I would get, then I would be done sooner, right.

I'm on a 100% repay in 56 months. My attorney thinks that as things stand right now, im probably looking more like 40 months to complete without any additional other than tax refunds, which I doubt I'll have any way. last years refund was the same as my prep fees, and I doutb i'll get any refund the next few years now that I don't get the deductions for our house, and no longer get to deduct for certain work related travel expences (changed jobs, non-qualifying now).

[LadyInTheRed]

From my understanding, the great majority of plans that "never make it thru a 13" are those who convert to a chapter 7 due to a change in circumstances.

That's my understanding too.

Another reason for "not making it" is that the debtor gets a windfall or large increase in income and decides to dismiss the 13 and deal with the debt another way.

There are, of course, the 13s that fail because the debtors haven't stuck to their plan. Either the plan was not well drafted in the first place, or the debtor was unable to stick to a budget. A well drafted plan means that it includes once-a-year expenses and things like home repairs. If the debtor doesn't stick to their budget and put money aside to cover things like a leaky roof, they are setting themselves up for failure.

So, when you hear most 13's fail, remember that you are for the most part in control of whether your plan succeeds. A debtor needs to take an active roll in making sure they have a reasonable plan and then stick to it. This starts with the debtor being realistic about what is reasonable. If you insist on keeping your boat even though that increases your plan payment and leaves nothing in the budget for home maintenance, you're going to have problems. If you are unwilling to stop having filet minon and a $50 bottle of wine every Friday night, you need to get your priorities straight. If you are unwilling to face the fact that you can't afford to keep your home, you're setting yourself up for failure.

Don't let statistics scare you. Just do what it takes to make sure you come out on the right side of the statistics.