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Asked about 1 year ago - Los Angeles, CA
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I filed for bankruptcy 13 because I couldn't afford the lawyer what he wanted. I filed and also got confirmation of the plan. I didn't have much except for alot of credit card debt.
4 months after my confirmation order, I got a 8% raise. I want to be honest and tell the court as now I have about $150 more per month.
Should I write a letter to the trustee and tell her I got a raise of $150? Or do I have to file some formal paperwork to tell her?
Thanks ahead of time.
Wow...well, first of all let me congratulate you on representing yourself and getting your plan confirmed. That is not an easy task. A recent report by the Bankruptcy Court here in the Central District of California showed that less than one percent of Chapter 13 cases done without an attorney get to discharge (see more at http://www.bklaw.com/bankruptcy-blog/2012/04/ba...).
Anyway, what percentage is your plan presently paying to unsecured creditors? If it is less than 100% then you MIGHT have to eventually increase your plan payment, but right now I don't believe you need to do anything. Your plan confirmation order and the local bankruptcy rules require you to submit annual income and expense updates to the Trustee, on the anniversary of the confirmation of your case, and your tax returns each year as they are filed.
It is up to the Trustee or your creditors to file a motion to increase your plan payment if it is warranted based on your change of income. It is not something you are required to do yourself, although it's amazingly commendable that you thought about it.
Just be sure to file the annual reports with the court and serve on your case trustee along with your annual tax returns and see what happens then.
Also, do not forget to take the post filing debt management course and get that filed with the court so you don't forget.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://www.bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
In most districts that standing chapter 13 trustee has a policy concerning if you report a raise in income and how to report the increase. You need to be careful of what you report to the chapter 13 trustee because the increase in income will or can trigger a request for an increase in your chapter 13 payment because of the increase in your disposable income. The situation needs to be examined carefully from several different points of view. At the time that you got the raise was there also an increase in your? If for no other reason than to show the net increase you are probably going to want to amend schedule I which is the schedule that shows your income and the deductions from your income such as federal and state taxes and social security and medicare.
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