RE: OT
First of all, I commend you for doing your best to try to pay back your debt. The bankruptcy laws are designed for people like you -- people who are doing their best to dig themselves out of a hole that may be just a little bit too deep.
The answer to your question is this: Yes, working overtime will affect your payment schedule. The reason is, when you file for bankruptcy under Chapter 13, the bankruptcy court creates a repayment plan, under which you repay creditors over three to five years. Income from the previous six months is used to calculate an average, which is then used to help determine your monthly payment. After your Chapter 13 payment plan is initiated, you need to keep the trustee informed when your income increases or decreases. Your trustee may seek to increase your payment accordingly.
Changes made to the bankruptcy laws in 2005 hold attorneys to tougher ethical standards. While I would advise you to stop killing yourself with overtime (unless it is absolutely necessary), it may be bad faith if I told you to quit you job in order to qualify for bankruptcy. Your bankruptcy petition would have to indicate that your income will be increasing soon after the bankruptcy. This would look suspicious.
Personally, I am not a big fan of Chapter 13 plans. The purpose of a Chapter 13 plan is to protect an asset such as a home. It's a good idea, but the costs are considerable. The plan takes up to five years. In an economy where your income may fluctuate, this makes them especially hard to get through. Chapter 13 bankruptcies have a low completion rate. In a Chapter 13, you will need to put every available dollar into your plan payment either until the debt is paid in full or you complete the three- to five-year payment plan. You will find it very difficult to save anything or prepare for emergencies until you receive your bankruptcy discharge.
Some people who file Chapter 13 end up needing to convert to Chapter 7. This entails additional expenses. You may not be able to maintain your Chapter 13 payment plan, but you may also have too many assets to qualify for Chapter 7. Suddenly, you're facing the prospect of having your debts come back to life. Plus, you cannot get the bankruptcy off your credit report for the next 10 years once it has been filed. That's not good.
Instead, I tend to advise clients, if possible, to file Chapter 7 bankruptcy or to use available assets to negotiate a deal with their creditors. While it seems natural to want to protect the assets, I've found that an immediate settlement with a fresh start can be superior to a five-year payment plan.
First of all, I commend you for doing your best to try to pay back your debt. The bankruptcy laws are designed for people like you -- people who are doing their best to dig themselves out of a hole that may be just a little bit too deep.
The answer to your question is this: Yes, working overtime will affect your payment schedule. The reason is, when you file for bankruptcy under Chapter 13, the bankruptcy court creates a repayment plan, under which you repay creditors over three to five years. Income from the previous six months is used to calculate an average, which is then used to help determine your monthly payment. After your Chapter 13 payment plan is initiated, you need to keep the trustee informed when your income increases or decreases. Your trustee may seek to increase your payment accordingly.
Changes made to the bankruptcy laws in 2005 hold attorneys to tougher ethical standards. While I would advise you to stop killing yourself with overtime (unless it is absolutely necessary), it may be bad faith if I told you to quit you job in order to qualify for bankruptcy. Your bankruptcy petition would have to indicate that your income will be increasing soon after the bankruptcy. This would look suspicious.
Personally, I am not a big fan of Chapter 13 plans. The purpose of a Chapter 13 plan is to protect an asset such as a home. It's a good idea, but the costs are considerable. The plan takes up to five years. In an economy where your income may fluctuate, this makes them especially hard to get through. Chapter 13 bankruptcies have a low completion rate. In a Chapter 13, you will need to put every available dollar into your plan payment either until the debt is paid in full or you complete the three- to five-year payment plan. You will find it very difficult to save anything or prepare for emergencies until you receive your bankruptcy discharge.
Some people who file Chapter 13 end up needing to convert to Chapter 7. This entails additional expenses. You may not be able to maintain your Chapter 13 payment plan, but you may also have too many assets to qualify for Chapter 7. Suddenly, you're facing the prospect of having your debts come back to life. Plus, you cannot get the bankruptcy off your credit report for the next 10 years once it has been filed. That's not good.
Instead, I tend to advise clients, if possible, to file Chapter 7 bankruptcy or to use available assets to negotiate a deal with their creditors. While it seems natural to want to protect the assets, I've found that an immediate settlement with a fresh start can be superior to a five-year payment plan.
. So many things going on right now I really do not know what the right direction will be for us to take. The reason for the Chapter 13 is so we can strip a 90K second mortgage. We will still be $30K upside down, better than $120K. Sometimes I wonder.... is the house even worth the battle.
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