Overtime & Bonus

[Amadan]

We are getting ready to file soon, and I still dont have a clear understanding of how this works. RIght now i get about 5-7hrs of overtime a week. Just over a year ago I was averaging 15-20hrs. What happens if the economy actually does pick up (or enough competitors fail) to cause me to satrt working overtime again? Does the trustee get any extra income I make over the next five years? If so I would rather just have my boss put me on salary. I would rather work the extra hours free than bust my rear and have to live like a pauper with no benefit from it.
What about bonuses? We stopped getting them a few years ago, but I believe we may start getting year end bonus checks again. That was how we used to pay for Christmas. So now that will belong to the trustee?

[Lissy]

I believe it's going to depend on your trustee and possibly how much you end up paying back to unsecured creditors. I am salary so I don't know much about how they would handle OT (other than whatever you've made in OT for the last 6 months will be factored in to your income number). That would be a problem if you expect to ever go back to working straight time, as your payments would be based on that higher income.

As for bonuses, it's a maybe. I was in the same boat when I filed - eligible for a bonus, but not sure if I would be getting one. I did - after I filed - and notified my atty. We're playing the waiting game to see if the trustee is going to want it. As I understand it, some do and some don't. Or sometimes they just want half and let you keep half. There's no clear cut answer on this.

[mkstlowe]

i receive a one time bonus in January. Won't get again. I'm told it might hurt me and the trustee can use it as an extra 800 dollars on my monthly income. If so this will KILL me! Now i'm also told if you have change in income you can ask for a payment change. I told my attorney. If they won't over look it and my payment will be based on 800 extra. We will go back. It's really 800 i don't have.

[Flamingo]

Your financial house is not under your control while you are in a Chapter 13 Plan; your trustee controls your finances. Ask your attorney after your Plan is filed what you should do about future fluctuations or decreasees in income during your plan as they will occur. Your attorney can advise you correctly as to your district and what your trustee requires. Large bonuses, increases in income, lottery winnings, inheritances, etc., etc. are items that increase your disposable income which means there is more money available for your creditors. If you are required to report these items and don't and your trustee finds out, hello Chapter 13 dismissal. Always check with your attorney when it comes to anything financial during your plan...don't guess.

[kornellred]

The thing is - how can the trustee find out about extra disposable income? Once your Chapter 13 plan is confirmed, it does not change unless someone motions the bk court to grant a modification. If the trustee requires that you submit your tax returns for the duration of the plan, this may spur an inquiry if your income rises above a certain level. I am not 100% sure, but this provision must be ordered by the court in the plan confirmation. The trustee will not look any further that the court order when it comes to compliance.

[Flamingo]

The thing is - how can the trustee find out about extra disposable income? Once your Chapter 13 plan is confirmed, it does not change unless someone motions the bk court to grant a modification. If the trustee requires that you submit your tax returns for the duration of the plan, this may spur an inquiry if your income rises above a certain level. I am not 100% sure, but this provision must be ordered by the court in the plan confirmation. The trustee will not look any further that the court order when it comes to compliance.

The trustee can request at any time during your Plan your financial information - we were advised that by our attorney. Also it appears from postings here in the forum that many more are being required to submit their tax returns annually after filing. We did and we had to provide a copy of both our state and federal returns within 5 days of filing. I believe under the new law it is required to submit tax returns but it still appears to be a district related thing. In any event, why take the chance? The best thing to do during a Chapter 13 is not to hide anything and that will ensure a successful outcome.