Bonus question

[Lissy]

I filed for Chapter 13 today in Florida. There is a possibility that I may receive a performance bonus in my paycheck next week. I haven't been told yet whether I am getting a bonus or how much it may be and I have no history of receiving bonuses, as this is my first year with the company I work for. I am eligible for up to $7000, but it is in no way guaranteed. I asked my atty about this and since I have no idea as to amount or probability of a bonus, we did not list it as an expected increase in income. He said we'll cross that bridge when/if we get there. I understand this is considered income received during the plan and that the trustee will probably want the money. But I would rather pay the entire thing in one lump sum than have it increase my monthly payments. Would that be possible? Also, will the trustee take all of it or would I possibly be permitted to keep a portion of it?

[Flamingo]

Until you have the bonus in hand and know what the amount is, there is not too much you can do right now. A Plan cannot be based on an event that has not yet occurred or guessing as to the amount of a bonus, etc. When you get the bonus, contact your attorney immediately as your Plan may have to be modified.

[isabella]

Bonus

When you get your bonus, contact your attorney, they will know based on your circumstances and Trustee if you need to surrender the bonus.

I just got my bonus, and was able to keep it, I hope the same for you.

[TexasEx]

I was also worried about the same thing. Actually during the 341 meeting one of the questions asked was about bonuses. I answered truthfully and said that my bonus was not guaranteed and was not sure if I would get one this year. Nothing else was asked and the trustee said nothing else about it).

Today I received a $12K bonus and my lawyer said I could keep it since our trustee does not require yearly tax returns and did not specify during the meeting or anywhere that I would be required to surrender tax returns/bonuses (yeah!) so I guess it all depends on your trustee...

[Lissy]

Thought I would update on this. I did receive a bonus of $5k in my last paycheck. I called my atty and told him. He said since the bonus was paid out in March and I filed in February, don't submit that paycheck unless the trustee specifically asks for it. So more waiting until my 341 in April. *sigh* I can't wait until I'm confirmed!

[NoTomatoCan]

I am in a similar situation... potential bouns later this year. It is not guaranteed, but apparently our trustee just looks (closely) at tax returns and if they are considerably above the previous year then they will request a modification. So I get to keep any potential bonus, but trustee may modify the plan to recoup that $$ going forward. (Which could be bad if the bonus never occurs again!!!)

[TexasEx]

Sorry to hear that. I think we are very lucky that our trustee is very easy going. My trustee asked about it during the 341 meeting and I answered truthfully (I hadn't gotten one at that point and the bonuses were not guaranteed). Nothing else was said by the trustee during the meeting or since. Since our trustee does not require tax returns my lawyer said I could keep it all. Considering I just got a $12K bonus we are very happy that we have a fat emergency fund and even some money for a vacation and even Christmas presents for later this year.

[kornellred]

I do believe that TexasEx is correct in stating that the possibility of retaining bonus monies while in Chapter 13 depends largely upon the trustee. This may apply only to bonuses that escaped the 6 month look back period when your gross monthly income was calculated. If a bonus was included, them your DMI was calculated upon the inclusion and is consequently permanently higher for purposes of the Chapter 13 plan payments. There would be no need for the trustee to confiscate an annual bonus payment since it is integral to the worked-out budget details of the debtor.

Now - if the bonus payment falls outside the 6 month look back period, and the trustee asks if the debtor receives one, and then insists upon confiscating it, then the debtor is pretty much out of luck.

That leaves a question as to whether the trustee actually has that much latitude, since this matter is known to be settled in both ways.

[spmtf]

How about if you get a bonus but dump the whole thing into your 401k plan?
I got a $10K bonus and had my company put the whole thing into my 401k. How would this count?

[oops123]

Sorry to hear that. I think we are very lucky that our trustee is very easy going. My trustee asked about it during the 341 meeting and I answered truthfully (I hadn't gotten one at that point and the bonuses were not guaranteed). Nothing else was said by the trustee during the meeting or since. Since our trustee does not require tax returns my lawyer said I could keep it all. Considering I just got a $12K bonus we are very happy that we have a fat emergency fund and even some money for a vacation and even Christmas presents for later this year.

I am so jealous. haha