URGENT! Big pay raise coming???!!!

[julsmom]

This is a wonderful thing of course but at the same time...we need some advice, we are in the middle of filing for our CH13, got our appraisal in to strip the lien on the 2nd, things are moving along, we have signed all paperwork & are literally, waiting on the appraisal report to turn in to move forward with the attorney. So...now, hubby has just been offered a wonderful new job opportunity which could double his salary! Yikes! Obviously, I know we need to call the attorney & figure out what to do. I still think it will be the best thing to file the CH13, get this fresh start we need, get from under the 2nd mortgage & move forward. But...what will happen, will his entire pay raise just get sucked in the BK...I am thinking I know we will lose quite a portion, perhaps we can pay off in 3 years instead of 5? But I know we can also plan for things like increaseses now for the new health insurance plan, 401K for DH, etc. What about kids accounts? I am thinking they would frown on kids college accounts or things? Any advice would be most appreciated! DH is excited but at the same time, is thinking man...he is going to double his salary & not see ANY of it...

[SMinGA]

Double check your state's exemptions - but investing in a 401k should be fine, as long as its a reasonable amount. 50% of one's pay would probably not be reasonable. Kids education accounts probably not so great an idea. I believe contributions made 1+ years before filing are fine, but you're looking at the near future. Making sure you have adequate insurance should not be questioned. Multi-million dollar life insurance policies on the other hand would be taking it too far.

If you are over the state's median income for your family, you must do 5 years. Unless you're paying 100% to unsecured and are able to finish ahead of 5 years. If you're under the median now, you should still be able to do a 36 month plan however, even if future income would be over.

With a new level of income, you'll also need to check withholding for taxes - may need to adjust it a little?