Trustee process for increasing payment

[Clay3007]

So long story short my wife was not working at filing time, last year she went back part time made only 7k for the whole year and we turned our taxes in to the trustee like we have to. Nothing was ever said about the increase in our gross. Fast forward to this year and she started working full time last Jan, we did have to send our children to daycare at a cost of 10k for the year but with a raise I got and her wages were more then 50k higher then when we filed in 2019. 😬😬

Now I have asked to attorney about this and they keep saying wait and see if they do anything because of inflation and daycare yada yada yada.

But what is the process for the trustee to say whoa you’re making more so we’re raising your payment by $500 a month or what ever they come to. Can we redo or I & J since inflation is so high or are we just stuck with it?

also if they do adjust the payment will we have to go to court or will they just start taking a new amount since in ohio they do the payroll deduction?

[flashoflight]

In my area, the plan payment doesn't get modified unless YOU modify the plan. If you need an auto loan or mortgage or refinance, you will have to change your I&J numbers and that is when the trustee will snatch your raise. If you don't poke the dragon in my area, you can let it sleep the whole 60 months. From what your lawyer says, it sounds like you wait and hope they are too busy to care.

[Clay3007]

Thats what i have been hoping for, Fingers crossed! We have never had an increase in the 45 months of our plan except for one at the 90 day mark when they said the payment was not enough to even cover the secured payments but they only raised the base payment $21 a week.

[Barbisi]

Clay3007 , and flashoflight, far be it for me to rain on your logical parade, but when my husband was laid off and miraculously got another job that raised his salary by 14K immediately and then received an off-cycle bonus raise of about 5% later that same year (2019) the trustee pounced on us in 2020 and tried to unsuccessfully raise our payment by 100%! (He settled for a $300+ increase instead of more than $650, thanks to our astute attorney.)
Of course, as many commented at the time, we had a much "sterner overseer" than most, and after that single plan modification, he actually did leave us alone until our Feb.2002 discharge and May 2022 closing.
Carmella might be able to better comment, as she also lives in Ohio and may have had the very same trustee. She also was discharged in 2022.
Whatever the outcome, I wish you only the best of luck to survive the rest of your BK13 term.

[Barbisi]

TYPO : TYPO -I meant 2022 discharge, not 2002 discharge -somehow, I'm making these little errors all over the place, LOL!

[Clay3007]

Thats my fear but when my wife took the job we asked our attorney about it and they said go for it. I asked about a possible payment increase and we were told That daycare and inflation possibly would be enough to justify the extra money. But we did not account for me getting a 15% raise this year due to my union contract.

[Clay3007]

Also Barbisi when they increased your payment did they just start requesting you to pay that amount or how did that happen?

[mh321]

So me and my wife have had something similar happen. When we originally filed, I was working full time and she was working part time ($80k takehome). Fast forward about halfway through our payment plan (2021) and now we are both working full time and our income has more than doubled (About $165k take home). Our lawyer had said to just sit tight as in his experience the Trustee hasn't increased payments on 13's. So we did...... then a few months later the Trustee said they wanted to increase our payment by 150% (which was very doable actually with the money we are now making). We made those payments and the Trustee asked for an annual declaration (which our lawyer has never had the Trustee ask for in any 13 case). It seems the amount our income went up was a huge alarm for the Trustee. The last declaration was submitted at the end of last year and now the Trustee wants to increase our payments another $1k a month (which is doable). We'll have to go through this whole thing at the end of the year again before we are done early next year.

For both increases, the Trustee had it start 2 months later.

[Barbisi]

Clay3007 and mh321, in our situation we were not in a 100% payment plan when we were confirmed on 08/2017. Therefore, the trustee could raise the payment whenever enough additional income came our way to satisfy the 100% DMI rule so that the creditors would receive as much repayment as was possible.
He monitored us closely every year on the confirmation anniversary in August after we had filed our tax return by April; strangely, we were always allowed to keep our tax refunds, but had to submit a copy of our returns each August to show the current income level.
Before my husband was laid off by the chintzy defense contractor for whom he had worked a mostly miserable 15 years, he never received any salary bump of more than 2% during the BK13 years. (He had been promoted once when we lived in Virginia and had gotten a nice raise there and had gotten a decent profit-sharing payout in Colorado for a few years before that program was discontinued.)
By the time he was finally laid off, he was in a clear career rut, and getting the new job the next month after the layoff was truly heaven sent - much better pay (14k increase, off-cycle pay increases once a year for a couple of years, profit sharing every year, superior health and life insurance, etc.) and a more pleasant work environment. He also received three and a half months' worth of severance pay and health insurance concurrently with the new benefits so we were able to buy a new mattress and get some very pricey dental work done for me that we otherwise would never have been able to do in BK13.
He waited until August 2020 to, without warning, attempt to raise the payment by more than $700: our attorney who had dealt with this particular trustee for many moons, was shocked: he said that in his experience, this trustee had never raised the payment of any of his clients ever. Nonetheless, he was determined to fight this modification motion. He was able to negotiate an increase of a little more than $300 instead of the demanded amount. And luckily, that was the only time he increased the payment.
We obtained our freedom in Feb.2022, my husband obtained his current job in April 2022, we sold our Colorado house just before we left Colorado for Washington in May 2022 and received our closing notification on the same date, we moved into our first Washington rental (May 24,2022).
We have two post-bankruptcy friendly CCs and bought two newer, better cars, all obtained since June 2022. (Please read my many other posts and also check out Zombie13 (my spouse) for helpful info as well.)
Of course, the real post -BK13 Guru Team on these forums are the one and only shipo and justbroke -they know it all and have seen it all, LOL!
I wish you guys only the best and hope you both get through this as pain free as possible.

[Zombie13]

Clay3007 - so, you have 15 months remaining; 25% of your plan. You might end up with a higher payment, if your disposable income has increased significantly from when you first filed. There is a 10% rule of thumb; not sure if it applies solely to gross income; but I would say, ask yourself if you have 10% more in the bank after inflation, childcare, etc. You can use these as arguments in your case, even if you do have 10% more available now. In our case, we had far more than 10%, so the trustee had an 'easy argument to prove' when they requested to increase our payments. So, 10% would be the minimum, with a lower probability of trustee pursuit. If you have 20-25% more, then yeah you are likely to pay more.
Now if you had 6 months left, it would probably not be worth the trustee's effort. In our case, we and our attorney received a letter in the mail from the trustee; the court also received a copy. It exlained the trustee's justification to request a payment increase of a certain amount. Of course, it was all focused on increase in income, with no consideration for increases in expenses; the trustee did not have visibility into that anyway. It was our job to push back by providing evidence of increased expenses via the I&J, and documents backing up our claim. It's a good idea to do the I&J's on your own anyway, so you can understand where you are, and discuss with your attorney.
The way I always saw it was: they wanna raise the payment? Fine. I'll just make more money. Bring it on, I can do this all day every day, 24/7/365. beeyaa*ch. The good thing, with that perspective and approach - if you do increase your income, the request to increase payment is always behind the income increase, by 6, 12, 18, 24 months. So you may get incremental increases, and nothing happens. Meanwhile, you improve your situation. Then the payment might increase. But you're already on that income increase track. This is about envisioning your future: picture what you want your future to be, and you end up taking the steps to make it happen.

[Clay3007]

We are not in a 100% plan either, Pretty close to 1%. But now our income has gone up 100% since we filed due to raises, mandatory overtime and my wife’s job. We usually have to send the trustee our tax return papers after we file and it says we can $1500 + and credits we get for the children. Which we are right at $1500 for the year on the return so no problem there but that’s how I’m assuming they check our income since they have never asked for anything else since we have filed.

[Barbisi]

Well, Clay3007 , as justbroke said somewhere on these forums, make sure you do increase your income while in BK13 - that bodes well for your post-BK13 future. Congrats on making that happen during a pandemic!
If indeed you are earning that much more since your filing, than the trustee will probably want to raise your payment. But it also sounds like you have some pretty considerable childcare costs that might offset your increased DMI.
It seems like you really need to get your attorney involved to possibly negotiate the smallest additional payment the trustee will accept.
Good Luck.

[OVERIT365247]

Clay3007 sounds like you're in a similar situation that I was in previously. I am also in Ohio, began working a new job about 2 years after filing. I remember being so worried about even taking the new job because I basically would be making double what I was at the time and I was for sure my payment would increase and I didn't want just have my total raise go to my payments. My attorney also told me the same thing, just wait and see if the trustee says anything. So long story short, took the job, submitted my tax return in Feb of 2021 and didn't hear anything from the Trustee, just the typical letter that I normally would receive indicating my return was received and I didn't have to forfeit any refunds to the Trustee. Thought maybe the Trustee was just ok with the increase and then BAM August of 2021 they sent a notification that my payment would need to increase.

My attorney submitted a modified plan and my payments went up by over $1300. It was a shock because I too thought by my calculations the most it would increase with my increased expenses would be $500 max, boy was I wrong. It was definitely painful as basically my salary went down to a little over what I was making previously and I considered just saying forget the whole thing because I didn't think I'd be able to make it 18 months with that high of a payment and still pay my bills; but I thank God for this forum and the extremely helpful folks on here who convinced me to stick it out, cause it turned out to be doable and praise God my case is now complete and just waiting on discharge!

Moral of the story as a fellow Ohioan, it may take a while for them to notice for whatever reason but you should expect a payment increase and like Barbisi suggested talk to your attorney about negotiating the smallest payment increase you can, but start saving now if you can. Blessings for the rest of your journey!

[Clay3007]

Clay3007 sounds like you're in a similar situation that I was in previously. I am also in Ohio, began working a new job about 2 years after filing. I remember being so worried about even taking the new job because I basically would be making double what I was at the time and I was for sure my payment would increase and I didn't want just have my total raise go to my payments. My attorney also told me the same thing, just wait and see if the trustee says anything. So long story short, took the job, submitted my tax return in Feb of 2021 and didn't hear anything from the Trustee, just the typical letter that I normally would receive indicating my return was received and I didn't have to forfeit any refunds to the Trustee. Thought maybe the Trustee was just ok with the increase and then BAM August of 2021 they sent a notification that my payment would need to increase.

My attorney submitted a modified plan and my payments went up by over $1300. It was a shock because I too thought by my calculations the most it would increase with my increased expenses would be $500 max, boy was I wrong. It was definitely painful as basically my salary went down to a little over what I was making previously and I considered just saying forget the whole thing because I didn't think I'd be able to make it 18 months with that high of a payment and still pay my bills; but I thank God for this forum and the extremely helpful folks on here who convinced me to stick it out, cause it turned out to be doable and praise God my case is now complete and just waiting on discharge!

Moral of the story as a fellow Ohioan, it may take a while for them to notice for whatever reason but you should expect a payment increase and like Barbisi suggested talk to your attorney about negotiating the smallest payment increase you can, but start saving now if you can. Blessings for the rest of your journey!

While this def does not help my anxiety thank you for the info. I got my letter from the trustee today saying my tax return papers were received and I did not owe any of my refund for this year. Luckly if it takes them that long I’ll get another raise in June to help offset anything and my plan is over next may so fingers crossed