Getting a raise...

[becky20]

So I know that our trustee gets tax statements each year, and I know that any raise over 10% of our salary can cause our payment to increase. I'll let our atty know if this raise goes through, but in theory, if the raise doesn't go through until July or August, technically it wouldn't raise our income for the year by more than 10%, and the following year would also come out to a less than 10% raise for the year (for example, if our yearly salary is 100k, then 10k would be 10%, so if our total raise is 14k, but due to getting it in July or August, this year our end of year income was 107k and next year 114k, then both years we skate buy as less than 10% increase from prior year income). So it'll be interesting to see if, due to the timing of the raise, if we'll get away without seeing an increase to our payments. Anyone have any thoughts on this type of scenario?

[newbie2]

So I know that our trustee gets tax statements each year, and I know that any raise over 10% of our salary can cause our payment to increase. I'll let our atty know if this raise goes through, but in theory, if the raise doesn't go through until July or August, technically it wouldn't raise our income for the year by more than 10%, and the following year would also come out to a less than 10% raise for the year (for example, if our yearly salary is 100k, then 10k would be 10%, so if our total raise is 14k, but due to getting it in July or August, this year our end of year income was 107k and next year 114k, then both years we skate buy as less than 10% increase from prior year income). So it'll be interesting to see if, due to the timing of the raise, if we'll get away without seeing an increase to our payments. Anyone have any thoughts on this type of scenario?

Becky, I've wondered about this myself. We are at the over 10% mark in increased income since we first filed (2006) but if the trustee looks at year to year then it isn't 10% in any given year. Sent in the income tax returns to the trustee last week and haven't heard anything yet about his wanting more money.

[andy158]

Just continue making your payments until you hear otherwise. Our attorney said that most raises can be offset with increases in living expenses, property taxes, etc. If the trustee wants to modify the plan your lawyer can submit new schedules reflecting expense modifications. Chances are your trustee is not going to analyze your returns and calculate how much of a raise you got. If the figures are close to the previous year without any red flags, you shouldn't have any worries. Most everyone can expect some increase in their wages through the course of their plan. Anything over 10% per year starts to get attention. Remember your plan was calculated using income the year you filed under the presumption it would stay steady. On the other hand any decrease in wages has to be significant to change your plan payment. Last year I was laid off for two months and our attorney told us that would not warrant a plan modification until it reached the 6th month. My wife and I both got 5% raises in our salaries this year (we both make the same so that would be 10%) which only increases our gross monthly income by $153.00. Not enough to raise an eyebrow. Our plan payment is $1056/mo.

Someone can chime in here, but I don't think an increase in your plan payment is retroactive. It only increases the remaining payments.

[SMinGA]

Your logic works if your trustee's rule is "10% increase over prior year" but not if its "10% increase in gross monthly income" or "10% increase over what you made at the time of filing".

Depends on your trustee/terms. But as others have pointed out - if you need to submit a modification due to income change, you'd be able to update expenses as well.

[SMinGA]

If you each got a 5% increase, it does not amount to a 10% total increase. Just like if only one of you got a 5% increase, it would not have increased your combined total income 5%, only the one that was raised.

My wife and I both got 5% raises in our salaries this year (we both make the same so that would be 10%)

[andy158]

Your right SMinGA. Percents are ratios and my math was wrong.