concerned and hoping for some input

[livefree22]

Hi Everyone, i have been on this board for the last few months and even though i have not posted until now it has been a great help to just read your encouragement and suggestions. I hope you can take a minute to help me sort this one out. I have been in Chap 13 since March 2010 and so far have been following a budget and have made 5 payments things are finally getting better and i actually feel like i can breathe after 5 years of torture and fear. So, right now there is a rumor going around that i might be up for a promotion and there will be an income increase of about 6000 (about 8%) a year. Its wonderful to hear especially after not receiving an increase for almost 3 years but now comes the thinking me:
1. I probably have to report the increase to my attorney but does that mean i have to start the process all over again (Schedule I and J) etc?
2. Will they look back at my other paystubs or just the one with the increase?
3. Since this is a promotion and there is other expenses i didn't plan on before (professional wardrobe, more travel, lunches etc) could i allocate this against the increase?
4. Could i put some of this increase in my retirement since i have not been able to participate into it for the last 5 years?

Now of course this might not happen but i am just thinking ahead and would love some input.. I was just feeling good about our finances and now i am all nervous again.
I am in MA and still awaiting confirmation which my lawyer says it could take about 9 to 12 months.
Thank you all for your input. Pam

[LadyInTheRed]

Let your attorney know about the increase if and when it happens. You may need to amend your plan, but maybe not. The rule of thumb seems to be that you need to report increases in income of 10% or more. But, it varies by district and trustee.

If you do need to amend your plan, you will be able to include your increased expenses in calculating your new DMI. Don't forget to include the increased income taxes! Whether you can put it in retirement is something else that varies by district. Ask your attorney. If your employer matches contribtuions, try for the max they will match.

Good luck with the promotion. I hope you get to keep your raise!

[GatorDan]

I might be in a similar situation in the next year or so. They way I have rationalized it is that if I get a raise and the trustee takes that raise and increases my payment accordingly, I am still where I was pre-raise. Once the 13 is done, I'd be able to enjoy that raise instead of hoping for one to come post-13.

[livefree22]

thank you both for your input.. i will await the final decision from my employer and then discuss with the attorney...
GatorDan i agree with you .. it will be nice to have this raise later on either way.

[1dayatatime]

Our Trustee requires us (on paper) to report any expected income increase over 10%. When my wife got a new part time server job, we tracked her income for a few weeks, came to the conclusion that it would likely be over the 10% and notified our attorney. He said, "don't worry about it". I hope he's right and I hope you get a similar response!