Will trustees raise the payments after a raise, if we are 100%

[sabian]

We are in kind of a strange situation here. The Mrs. has a 341 on the 30th of April. We just found out that next month, she will get a 15% raise a few weeks after the 341. We will be in 100% payback over five years. I was just wondering if they will raise the payments and lessen the time, or not even address it. We are in Chicago, IL if that matters. I understand that things change from city to city and we are okay with whichever way it goes, but we were just wondering what to expect.

Thanks for your time!

[justbroke]

For a 15% raise, the Trustee probably won't bother you. If it were 20% or more, they could increase your payment.

Contrary to popular belief, a person in a 100% plan can still have their plan modified on motion by the Trustee, due to an increase in income. This is because the bankruptcy code is very specific about a Chapter 13 debtor surrendering the control of his/her disposable monthly income to the care of the Trustee for distribution to creditors. Fancy-speak for, they get all your extra money.

In a case like that, the duration of your plan would shorten since the payments are increased. I think of it this way... the creditors (Trustee) would rather have payment now than in the future.

Has nothing to do with the time-value of money, but purely the odds of a Chapter 13 debtor getting a discharge. From the Trustee's perspective, you get as much as you can get, as quick as you can get it.

[sabian]

thanks!