Life changes during chapter 13

[Clay3007]

As i previously posted awhile back my wife has returned to the workforce. During a normal period great, right now not so great. Were getting to the point were we are going to report the income to the trustee and see where it takes us. Our attorney said they usually never bat an eye at a salary increase unless its more then 10%. Problem is we are looking at around a 8% increase this year since she started in august. Not a bad increase but they want her to go full time after the holidays and thats gonna raise the red flags when they see a 30% increase on our 23 tax papers. We do have 2 children in childcare which the attorney said will help knock down the values. But we will loose that in 23 when the little one goes to kindergarten which again will throw the red flags.

[shipo]

The general rule of thumb is greater than 10% year over year is what triggers a closer look. If you've been contributing to a 401(K) plan hike I would suggest next year you up your withholdings to keep you from exceeding 10% for the full year once your wife goes full time.

[flashoflight]

The reason for the informal 10% rule is because the trustee has to file a motion to modify plan and it's likely the debtor's attorney will request a hearing to show increased expenses as well so no chance the trustee will get all of what he wants. Just having the tax return doesn't do anything to change the plan. So it better be worth it for the trustee to file a motion with a high probability of success. With the price hikes this year, even a 15% raise probably is not worth worrying about.

In my district, it is rare for a trustee to motion to modify plan based upon increased income. It is also possible for a creditor to file the motion to modify, but that is very rare. One of the local ch13 trustees does require new employment to be reported promptly so that could cause a motion to modify if you're unlucky enough to have that trustee. I wouldn't take a second job unless it's a 100% plan. For the rest of us, my lawyer says this isn't worth worrying about even with raises in the 10% area.

This is district dependent so go with whatever your lawyer says.

[Clay3007]

We did let the attorney know in august about the situation and they were the ones that said go for it. Work a few months and we can file to let the trustee know. Fingers crossed it goes smooth. The price of everything has gone up so much im glad my wife is back to work.

[Carmella]

A question regarding childcare. Does it end because a kid's in kindergarten? What about before/after school expenses or summer time child care? I have no idea if BK gives a hoot they might not, but it's definitely an expense if you need to pay someone when you are working after the kid gets out of school and/or during the summer.

[justbroke]

You can still have reasonable childcare expenses. Parent's are allowed to work and to use childcare services. Just expect that it will be questions and that there needs to be sufficient documentation showing the previous and ongoing costs.

[Clay3007]

A question regarding childcare. Does it end because a kid's in kindergarten? What about before/after school expenses or summer time child care? I have no idea if BK gives a hoot they might not, but it's definitely an expense if you need to pay someone when you are working after the kid gets out of school and/or during the summer.

Yes we will have before and aftercare once the little one starts kindergarten, much less then we currently are paying but our attorney said to get a receipt every week and keep them in an envelope so when the argument comes we have a leg to stand on.

[Carmella]

Yes we will have before and aftercare once the little one starts kindergarten, much less then we currently are paying but our attorney said to get a receipt every week and keep them in an envelope so when the argument comes we have a leg to stand on.

Unless you or your wife is off during the summer time...Summer care was awfully expensive when my daughter was young. I sent her to a few day camps including before or after care (usually not both). Keep your receipts on that as well since it is child care. Unless you have a friend/family member who doesn't mind watching your child without getting paid.