Income increases etc questions.

[momisery]

After reading the 13 thread, I have to ask. If we have a payment of about 200 per month for 3 years, what happens if hubby gets a better paying job? Can they increase what you have to pay? And an inheritance, will they take it all? I live in Missouri.

[13inIN]

It is absolutely possible. Chapter 13 is not a set payment in either direction. Changes in circumstances can raise or lower payments.

[optimistic1]

that is if in fact IF the trustee even pays attention to your increase in income, and nothing can stop you from entitling yourself to increasing your allowable expenses to compensate, as long as they are reasonable. An inheritance they will most likely gouge you of every penny to satisfy your creditors, so you can pretty much kiss it goodbye, unless it is large, and your debts are small, then you would have leftover for yourself.

[momisery]

So, you would have to make it the whole 2 years if that is your plan before getting any increases. If you get increases they can take how much more? Can they come after all of your increases? What is the maximum, does anyone know? I am just curious as many are filing 13 right now, but when the economy turns around next year some will find better paying jobs. Will they then have to pay it all back, or more of it? This could not only ruin them, but ruin the nations economy.

[busby]

If your income increased while within a chapter 13 bankruptcy and the trustee wants to increase your monthly payment - he does so first by filing that request with the court and a hearing is scheduled. The trustee just can't raise your payment without following the above procedure. This gives you and your attorney an opportunity to explain why there shouldn't be an increase. It's up to a judge to make the decision.

However, if they raise your monthly payment - they cannot raise it to more than a full 100% payback.

For example - if you're total debts included in the bankruptcy total $100,000 then under a full payback you would pay slightly more than $100,000/60 or $1,666.67/month. Your attorney's fees would be included as part of the total $100,000 but the trustee fees would not - but they aren't a large amount.

From what I've read from other people here and elsewhere - it's rare that a trustee requests an increase in monthly payment once you're already within chapter 13. And for those times when they do - your attorney can provide updated expense amounts to basically make it a wash.

[falken]

My trustee said they were not interested in increases in salary, only windfall earnings (lottery, inheritance, etc). If I took on a second job or got a raise it was all mine.

Then agian, I think I had the worlds most laid back trustee.

[motomom]

What about yearly tax returns. Do they take those????

[falken]

What about yearly tax returns. Do they take those????

They will either take it all, or tell you if its over XXX dollars ($300 or so), they want it.

[momisery]

So, say we owe 50,000.00 and in the chapter 13 our income is so low that we are asked to pay back about 250.00 for three years. That will not pay back the 50,000.00 only a percentage of it, correct? If hubby gets a good paying job again before the the three years are up they can take you back to court and ask for the whole 50,000.00? In three years we will be 62 years old and the idea behind this is to maybe put some aside since this economy destroyed us for our retirement. Right now we are considering giving up healthcare since we can't afford to use it anyhow. Hubby makes between 100.00 to 300.00 in commissions right now is all and unemployment is done. So, if in a couple years he goes up to making say twice that amount, suddenly instead of saving for retirement again, we are paying more to our creditors... we might as well let it all go and file for chapter 7 so we can save a bit. Either way we lose... we will lose a car in the chapter 7 and I am not so sure how we could ever buy another one that is decent to drive to work. Can they extend the 3 years to 5 years then ata higher amount, or once the 3 years is settle is it done?

[woeisme]

If your income changes, yes, they can change your amount you have to pay back AND the length of time you are in your BK, although if you stay below the median income and pay all your secured debts, I think you'll stay in a 36 month plan. If all you are trying to protect is a car, I would be tempted to take the $250 a month you'd be paying into the CH 13 and use it to make car payments and avoid all the uncertainties of a CH 13. But that's just me (someone getting through her 2nd year of a CH 13 and really depressed at the thought of 3 more years of this stuff!)

[optimistic1]

Either way we lose... we will lose a car in the chapter 7 and I am not so sure how we could ever buy another one that is decent to drive to work.

There are plenty of places to buy a car, you would be doing them a huge favor by getting one due to the economy they will bend over backwards to help you out. If not at a dealership, there are plenty of "buy here pay here" places that don't care what your credit looks like.

[momisery]

We were told they would take at least one of the cars, and we have some guns that are paid for too and they think they would take those. I guess 7 or 13, neither looks good on your credit report? maybe just let them take it all and go for broke at this point. i don't see hubby's job getting any better for a long time.

[lrprn]

Frankly the chances are small that even if your income increases, your confirmed Ch 13 payment will increase as well. Of all the Ch 13 filers who have ever posted here, there's not one who has had a confirmed Ch 13 payment increase solely because they had an income increase.

Could it happen? Yes, the law allows it. Will it happen? Very unlikely. It's important to keep your perspective here and go with the percentages. Just because something has a very small chance of happening, it shouldn't prevent you from filing. That's like refusing to drive because there's a less than 1% chance you might have an accident.

Try not to stress out over what might happen and focus on building a better financial budget to live on after you file. That's a much better use for all that energy, and it has a positive result besides

[momisery]

I appreciate your imput. But I have lost about everything over all of this and I am upset and angry. It would be different if I was living in a manson, but my home is small. Anyhow, nothing can be done about that. But in light of losing it all I have to keep in mind that I have two elderly parents, one is mine one is hubbys. If they would pass away they will be leaving something to us. This would be the last chance we would have at something for retirement as we are almost 60. I am sure we will work forever, but incomes drop as you age it appears. It looks like if you negotiate to pay say 250.00 per month for 3 years and suddenly win the lotto (which I don't play) or some windfall that they can take all of the old debt out of that? Did I understand that correctly. So, in our case it would be about 38,000.00 in unsecured debt as we own our cars free and clear. (cheap cars by the way) But part of that is credit card debt. We are upside down in this home of course. And the home we lost our tennat that is in GA is about 10-20,000.00 more on the loan than it is worth. So say it ends up being about 70,000.00 over all.. if we agree to chapter 13 at 3 years for 250.00 because we make nothing thanks to the rotten economy, the banks and wallstreet... if we get a windfall worth 100,000.00 they will take their 70,000.00 our of it?? False numbers, but you get my drift I hope"

[busby]

Wouldn't a better way of looking at this is in a best-case scenario if you file chapter 13 and get $250.00 for 3-years - you're eliminating your $70,000 of debt for the sum of 36-monthly payments of $250 for a total of $9,000 - a $61,000 savings.

In a worst-case scenario - you file for chapter 13 and then win the lottery or windfall of $100,000 then yes - you will end up paying your debt of $70,000 and still end up walking away with $30,000 to the positive.

But I agree with others - deal with the reality of that your payments probably won't increase and chill out. It's a difficult time but was the best decision I made.