Significant increase in salary

[rjd78]

I'm 18 months into my Chapter 13. I have a full-time salaried job. However, this week, I signed a contract to do some consulting work on the side. This work will nearly double my income. I am set to be paid monthly starting late January.

I know only my attorney can answer my questions with the utmost authority, however, while I'm waiting for him to call me back to discuss it, I thought I'd pose my question(s) here to see if anyone else has experienced this.

Basically, what should I anticipate as far as my payment increase to the trustee? I don't pay that much as it stands right now. Only about $50 per month. Also, my expenses have not increased at all.

Any help is appreciated. Thanks.

[AngelinaCat]

Is your contracting work going to be a steady thing? In other words do you know that you will be getting a set figure each month, or will it ebb and flow depending on the number of hours you submit each month?

[rjd78]

Each month I will be billing a set amount. And I'm budgeting a certain % for expenses that I know I will incur. So, to answer your question, yes, it will be a fixed amount billed each month, for 12 months.

[lrprn]

Each month I will be billing a set amount. And I'm budgeting a certain % for expenses that I know I will incur. So, to answer your question, yes, it will be a fixed amount billed each month, for 12 months.

I'm assuming that your plan does *not* pay 100% back to your unsecured creditors - is that correct?

What are you describing is a significant, fairly long-lasting increase in income - obviously adding up to more than 10% of your filing income. And it's coming in as cash - that can be very attractive to a trustee.

The new consulting job is likely to have increased expenses as well. Have you sorted out how much those new expenses might be?

Ch 13 trustees vary widely in how reactive they are to situations like this. Yours could petition the court to take all or part of the extra income, or could not care at all.

Bottom line - your lawyer is really the only reliable source of truth here.

[rjd78]

Ch 13 trustees vary widely in how reactive they are to situations like this. Yours could petition the court to take all or part of the extra income, or could not care at all.

What you wrote right here is very interesting. Hopefully, the my trustee isn't greedy (for lack of better words).

My plan doesn't pay 100% of my debts. And I have budgeted for various expenses that I know I'll incur. But, I know for a fact that there are going to be other expenses that will pop up as it pertains to this extra income. There's just no way of knowing until it happens. Maybe the trustee will tell me to wait until he gets my 2010 tax returns to determine everything. I don't know...

As it stands right now, I haven't heard back from my attorney. I called him a couple of days ago and he still hasn't returned my call or email. Apparently he's really busy right now. Regardless, I need to decide if this increase in income is worth my while very, very soon. And I can't do anything until I talk to him.

If I have to work an additional 25-30 hours per week, only to have to hand my earnings back over to the trustee, it's not worth my time. However, this is a HUGE opportunity for me and I'd hate to turn it down. But, if I'm working my butt off just to pay the trustee the majority of my earnings, I have a problem with that and don't see it as being worth it. It's really frustrating because I feel like my hands are tied.

The bankruptcy was filed to help me start over after some medial bills forced me into a no-win situation. And if I have the opportunity to make more money and ensure that I don't get into the same situation again, I want to take it. It just feels like that won't be the case.

(sigh)

[BKman]

Thats what my fear is. I work off commission only. I could have one great month and nothing for 2 or 3 months. I don't want them to see one good month and take it away and leave me nothing for the next.

[rjd78]

In doing a little reading, I've seen some BK attorney websites stating that the trustee can tell you to pay more if your salary increases "significantly." However, one of the websites I saw said that in the 16 years, and three different states, that he's been an attorney, he's never seen a trustee do this. But, that's not to suggest they won't.

Also, it was mentioned on another site that the trustee wouldn't request the payment increase until after he/she sees the tax returns for that year in which the salary increased. So, that would mean I'd have a full year to put that money away.

But, really, who knows except for my attorney.

I appreciate the responses.