QUESTION

Do I report this salary increase to trustee or wait until next tax return?

Asked on Sep 14th, 2016 on Bankruptcy - Nevada
More details to this question:
I am in a chapter 13, month 50. I just received a 10% raise. However, my plan ends two months after filing taxes. I only have unsecured debt, base plan with $1500.00 remaining. Thanks.
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5 ANSWERS

I think most lawyers would agree that a change in earnings of 10% or more should be reported to the trustee. In your case, I think you should report the change. If the trustee should request an amended budget and amended plan, you and your lawyer may be able to come up with a revised were updated budget that may not require an increased payment. Or it may call for an increased payment. In that case you only have nine Months or so of the increase.
Answered on Oct 06th, 2016 at 5:44 AM

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Landlord & Tenant Attorney serving Thibodaux, LA at The Louque Law Firm, L.L.C.
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Unless you are paying back a 100% dividend to your unsecured creditors you have an absolute obligation to report this raise to the court and the trustee. It may be that the raise does not affect your payments but if you are able to pay more into your plan you are required to do so. The fact that you are asking this question, with the qualification that your case ends 2 months after you could possibly be caught, tells me you know this already. Would you rather pay a little extra for 10 months or have 50 months of hard work dismissed?
Answered on Oct 06th, 2016 at 5:44 AM

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Bankruptcy Attorney serving Las Vegas, NV
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A 10% increase is not sufficient to warrant advising the trustee.
Answered on Oct 06th, 2016 at 5:44 AM

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Commercial & Bankruptcy Law Attorney serving Powell, OH at Ronald K. Nims
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You're required to inform the trustee of significant and unanticipated changes. Most people anticipate (optimism abounds even in this sluggish economy) receiving raises. I don't believe that it's necessary to report a routine (although nice) raise to the trustee.
Answered on Oct 06th, 2016 at 5:43 AM

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Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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What does your Plan say? While you might be able to GET AWAY with not reporting your increase in income, if your Plan specifies that you must notify the Trustee of an increase in income, and you fail to do this, you will jeopardize your discharge. And BTW, do not expect your discharge to come in lickity split after making your last payment. Because Chapter 13 cases undergo exhaustive audits, it may take up to a year for your case to wrap up/ Plenty of time for a Trustee to seek additional money from you using some ugly words like BAD FAITH or even FRAUD.
Answered on Oct 05th, 2016 at 6:09 PM

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