Business start-up during Ch. 13

[glennwethere]

I'm new here and had a question about starting a business. I filed a 13 a little over a year ago. I am finding it tough getting bills paid and I am really behind on the mortgage. I am suprised they haven't filed for a dismissal. Anyway, I just spoke to my attorney's office and aske them about how a trade in works on a vehilcle that is in the plan. She asked why I wanted to trade it and I said I am think of doing my electrical work on the side part time and keeping my day job and would therefore need a truck. She said she tought that the trustee would want any and all income that the business brings in. Is this right? I live in NY state.

[Gerry]

[lrprn]

She said she tought that the trustee would want any and all income that the business brings in. Is this right? I live in NY state.

The answer depends on how much extra income you are going to bring in and how your trustee tyoically handles income increases durin an active 13.

There's nothing in the current bk law that sets a minimum increase level, so your trustee can do whatever they interpret the 13 portion of the bk law to mean. The good news - frankly most trustees won't take the extra income unless it increases your income arund 10% or more in a year. Will yours be that large an increase?

You are supposed to notify your lawyer who then notifies your trustee about income increases, but most 13ers are considered to have met that requirement of the law when their trustee sees their annual tax returns that show the income increase.

Trustees are very busy people - they aren't going to force you back into court to modify your plan to increase the 13 payment unless they think it's worth their time and cost to the court to do so. Whether yours will do that or not is impossible for us to predict without knowing how much extra income you will consistently earn from the extra job.

[lrprn]

Gerry, if you really think 13ers need to do this, the next time you call your trustee to report an extra $0.25 of income via gumball machine winnings, please make it a conference call because I want to hear what your trustee says to you....LOL!

Seriously, most Ch 13 trustees provide a written page or verbal instructions about what you are to report during your 13. That's what you follow for the length of your plan.

For our 13 newbies, don't get freaked out here, ok? No Ch 13 trustee wants to know about a quarter's extra income. Really.

[glennwethere]

Thanks for the replies. One more question. My payment on my plan is X amount of dollars for 60 months. So we'll be paying whatever that comes out to over the life of the 13. Now say this 13 was based on an income of 100K a year. Now I start a business on the side, we still have the 100K and the additional side business brings in lets say 10K or less. Or how about 10K or more? Would this be handled differently? Back to the first question I was going to ask; the additional income from the business that the trustee would ask for, would this be applied to what we owe? Meaning it would get paid off quicker or do they take the new income on top of what the original plan asked for essentially making it not worth starting the business?

[road warrior]

IF you're in a 100% payback plan, they could re-do your plan to take some of your new income and then you'd be paying it off sooner.

If you're not in a 100% payback and you just generate a little extra money for yourself, then you should be ok. I think each trustee will look at each amount differently and may or may not want any or all of it.

Can you work out of the vehicle you're driving now? It would save you money up front and start making you money right away!!

[Gerry]

Gerry, if you really think 13ers need to do this, the next time you call your trustee to report an extra $0.25 of income via gumball machine winnings, please make it a conference call because I want to hear what your trustee says to you....LOL!

Seriously, most Ch 13 trustees provide a written page or verbal instructions about what you are to report during your 13. That's what you follow for the length of your plan.

For our 13 newbies, don't get freaked out here, ok? No Ch 13 trustee wants to know about a quarter's extra income. Really.

Thanks for the heads up. The next time I make an attempt at irony, I'll be certain to add a disclaimer.

[StartingOver08]

Gerry, the rest of us got your point!