Chapter 13 Plan – Getting a Raise
What if You Get a Raise During Your Chapter 13 Plan?
Chapter 13 Plan – Getting a Raise. What will happen if you get a raise during your Chapter 13 plan? Is it a good thing or a bad thing? Can it cause your Chapter 13 plan payment to increase? Receiving a raise during your Chapter 13 case can potentially alter the pay-back requirements for your Chapter 13 plan. It is important to understand a few general things about how a raise of income relates to your Chapter 13 case.
You May Be Under Duty to Report Your Raise
You may be required to report your raise to your attorney and the Chapter 13 trustee. Generally, if the raise is substantial such as an increase of income more than 10-15%, you should always report it to both your attorney and the Chapter 13 trustee. Although no increase in your Chapter 13 payment may be required, you are generally under duty to report substantial changes of income to allow these changes to be reviewed by trustee.
Raises in Some Chapter 13 Cases Will Not Increase the Plan Payment
However, in some cases, a substantial raise income will also cause the trustee to motion the court for an increase in repayment to your creditors. In such cases, your Chapter 13 plan payment must increase to meet the new repayment requirements for your new income level.
The Chapter 13 trustee, however, usually does not want to unreasonable burden the Chapter 13 case filer. The trustee does not want to overburden the case filers to the point where finishing their Chapter 13 plan becomes less likely. Sometimes the Trustee will not seek the maximum amount possible with the income level (such as turning the whole additional raise amount over for a payment increase). They will many times settle on a lesser amount negotiated by your bankruptcy attorney.
For more information on filing Chapter 13 Bankruptcy, check out our Chapter 13 Bankruptcy info. Bymaster Bankruptcy Law Offices offers FREE consultations. Call us today at 317-769-2244.
