QUESTION

Is it a legal requirement, that while in chapter 13 bankruptcy, if you earn annual bonuses from your employer that those bonuses must be surrendered?

Asked on Nov 22nd, 2012 on Bankruptcy - Minnesota
More details to this question:
I have an approved 5 year repayment plan setup on auto payments in the state of Minnesota. I am being told that any tax refunds or bonuses received get surrendered to the trustee. Is this standard bankruptcy law, or is this strictly at the discretion of the trustee If the latter is true, do I have any recourse to appeal this?
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1 ANSWER

Estate Planning Attorney serving Winter Park, FL
2 Awards
Although, I am not a Minnesota bankruptcy attorney, it is generally understood that the bankruptcy code requires that all disposable income goes toward your unsecured creditors.  That would include bonuses and tax refunds.  So the initial inclination is to say yes, it must be turned over to the trustee.  However, if the bonuses were assumed in your initial financial disclosure that your plan payments are based upon, then you may be able to keep it.  Chapter 13 can be a complex bankruptcy.  I would hope you have legal counsel.  Since every jurisdiction may handle these matters a little differently, I would speak with your attorney, or retain one in your jurisdiction to assist you with this issue. 
Answered on Nov 23rd, 2012 at 10:32 AM

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