Salary Increase During Repayment

[anonymuse]

I passed the means test be making $3,000 under the median income. (Made that paperwork really easy.) Since my disposable income is minimal to non-existent, I'd be able to file for a 3-year payback program instead of a 5-year one.

If I file for a Chap 13 and the tech sector picks up around hear and a year later get a new job which pays for example 25% more (not a minimal increase i.e. $38.4K to $50K (used to make $60+)), what happens? Would they just increase the amount I pay per month, or could they change the plan to a 5-year plan AND increase the amount I pay monthly?

Disclaimer: I'm still waffling between filing for chap 7 or 13 due to homestead exemption--need to breakdown and see a lawyer.

[Minnymouth]

While in Chapter 13 any increase in salary 10% or more must be reported to the Trustee. If you are already set on a 3 year plan, they will increase the amount paid, but I don't believe they would change it to a 5 year plan and increase it..... will have to check on this....

[CATCHMEIFYOUCAN]

increase in salary

hmmm, i just had an increase in salary from both my full time jobs .. about 3%from both jobs, do i just let the trustee know or just wait until he finds out? for better or worst?

catchmeifyoucan

oh, i also increase my "additional taxes," so instead of them taking out the norm i have them take out additional taxes due to the increase!?

[dac67]

This is something I am dealing with right now. I do or can have a sig. increase in wages and I have fallen behind in car payments and they are taking us to court to take back the vehicle, my lawyer is trying to deal with it outside of court, so I told my lawyer I can increase my work to catch up and he said OK, didn't ask any further questions. He also has told me at a certain point "we can make as much as you want", but he said I am not suppose to tell you. My trustee has nothing stated that he wants our income tax records. It is not at all stated in the court confirmation records under stipulations of the confirmation that he wants any info or tax returns. So we are just going with the flow right now, I am using the extra income to help catch up on carpayments and pay for oil, and propane for this winter cause otherwise we will have none. So it's not like I am going to Aruba with the extra income I will beable to show it is for items NEEDED. We were 1/2 way BELOW the state means and are on a 3 year plan.

[CATCHMEIFYOUCAN]

Lucky You !

Gosh what state are you filing in? The trustee sure doesn't want much!

Watch your car, hope it doesn't get repossessed underneath your feet! Repo's can be sneaky bastards (ooops). I read a forum somewhere, where they took someone's car - disregarding the law, and it just created more paper-mess and extra fees for that person to get it back!

Catchmeifyoucan

[gunsmoke]

I wouldn't tell trustee about a pay increase. Thats one of the reasons they want a copy of your tax forms for the first 3 years of your plan. I don't think I've ever seen a post on this or any forum from someone that had their payment increased because of a pay raise.

[ramone]

We had an orientation meeting with the trustee before our 341 meeting. He flat out told us that we're free to do anything we want to get extra income such as earning raises or getting a part time job and he won't come after it. He said he's only going to after money that we don't *earn* such as inheritances, etc.

[FoolAndHisMoney]

We had an orientation meeting with the trustee before our 341 meeting. He flat out told us that we're free to do anything we want to get extra income such as earning raises or getting a part time job and he won't come after it. He said he's only going to after money that we don't *earn* such as inheritances, etc.

Thank you for posting something positive on this side of the bk world. Sounds like this is a good trustee that wants plans to succeed to the end. Most chapter 13 trustees like to bankrupt the already bankrupt by demanding more money or dismissing. If it was written in the law that chapter 13s had to be the way you just described then most people would probably do this voluntarily.

[aa06a47]

We had an orientation meeting with the trustee before our 341 meeting. He flat out told us that we're free to do anything we want to get extra income such as earning raises or getting a part time job and he won't come after it. He said he's only going to after money that we don't *earn* such as inheritances, etc.

My trustee didn't say this at the orientation meeting. However, my attorney basically said lay low and just keep making the payments. I plan payment would just stay the same for the entire period. So, my plans are to lay low.

[treehugger1]

As I've mentioned in other posts, I'm exploring the idea of BK 13. While my attorney is not willing to give "advice" at this point (issues with the las and I appreciate that), he is willing to answer questions and address my questions related to the trustee in our district. He has said many times that if someone in this district files a 100% repayment plan, the trustee could care less about increase in income as long as the five-year plan payments are made. My bigger concern has been my vairaible income. I have recently met someone who is also in a BK 13 plan paying 100%. She stated that she has made every payment and is currently banking money. My take is that under the old law, you could wind up with a variable month payment plan, with some plans between 36 and 60 months. It sounds as if in our district, you get one or the other, but no inbetween under the new law. This is my situation. I might squeeze out a few more dollars and cut payments from 60 to 52 months, but in this district it won't be done. My attorney did say that if I come under 100% repayment, I will be required to report any change in income that exceeds 10%. In my case of variable income, I interpret that to mean a look at the second year's (into 13) could increase your payment if the income change is substantially up. That will definitely not be my case. In 2007, i can already predict my annual income to drop by more than $20K, and I need to be ready to ask for a potential plan modification for reduced payments.