I hate my plan and need advice please

[bigstick]

Hi, my plan was confirmed on 8/2/10 and I just am not happy with it and since that date some things have change and I'd like to go back for a modification or possible conversion to Ch 7.

My pay structure caused a lot of headaches getting the plan confirmed. My base pay was basically just below mean, but at the time of filing I was coming to the end of a 2 year period with guaranteed bonuses that took me well over. The bonuses are were / are paid twice per year, every 6 months. My attorney wrote up Sch I in a way that confused me but I guess he knew what he was doing. He listed just my base pay for monthly gross wages. Then under line 13 "Other Monthly Income" he listed 1/2 of my previous yearly bonus's NET income. I believe he felt that even though my guaranteed bonuses were gone that the trustee would not buy the fact that I may not qualify for bonuses in the future. So he tried to cut it in half as a guess. So what wound up happening is the trustee wouldn't confirm until a line was added that any bonus I rec'd above the amount he listed in Sch I, I would have to turn over to the trustee. So I didn't like that comment, but what was I to do. If I was actually have that happen I'd have to pay taxes on that income and pay child support on that income, yet turn it over. Sure didn't seem to fair to me.

Well - at this point the problem now has gone the opposite way. My first 6 months have passed and I've rec'd my first bonus. Problem is that my bonus wasn't even 25% of the 50% that my attorney included in Sch I. I'm assuming I can go back for modification on this issue alone? The difference between the amounts now makes my disposable income negative. Will that push me into an automatic chap 7 conversion? Also now due to this disparity in figures I'm 2 months behind on my mortgage, which I've never ever been behind on.

Any ideas, advice, words of encouragement?

[minan]

My understanding is that all income, bonuses, salary increases, tax refunds, inheritance, etc..have to be reported to the Trustee. Whether the Trustee takes this money or not varies state to state. For example, my atty stated that if our salary was to increase above 10%, chances are high the Trustee will want the extra money. Less than or up to 10% will not be required to turn over to the Trustee. Lucky for us, we don't expect any tax refunds nor any increase in salary over 10% per year, so we try not to worry about this.

If you don't report and the Trustee finds out (and they will find out), then it can be grounds for dismissal. Remember the Trustee's in the job to find all the income available for payment to creditors. In addition, the higher the monthly payment you make, the more money the Trustee makes in his fees. I'd talk to your attorney and have him explain step-by-step how he calculated the numbers.

[bigstick]

If you don't report and the Trustee finds out (and they will find out), then it can be grounds for dismissal.

Oh yeah this is spelled out very clearly in my documents. I know I have to send all bonus info as well as my taxes with a check to the trustee within 15 days. I'm not gonna mess with that one and get into any trouble.

[justbroke]

The problem with bonuses is that they are paid infrequently and you're tempted to spend them. Then, when the summer or winter months comes -- and home energy costs or other costs go up -- you no longer have the comfort zone you had because you spent the bonus! I think it's best to have the Attorney to write that you'd surrender the bonus each year, rather than factor it monthly... especially if they are large bonuses.

I know, it sounds silly, but receiving an annual bonus that is 10% of your salary, can actually be a pain in a Chapter 13 if it's factored in as monthly income.

[bigstick]

The problem with bonuses is that they are paid infrequently and you're tempted to spend them. Then, when the summer or winter months comes -- and home energy costs or other costs go up -- you no longer have the comfort zone you had because you spent the bonus! I think it's best to have the Attorney to write that you'd surrender the bonus each year, rather than factor it monthly... especially if they are large bonuses.

I know, it sounds silly, but receiving an annual bonus that is 10% of your salary, can actually be a pain in a Chapter 13 if it's factored in as monthly income.

Yeah I follow you, but the reason he had to do it this way is because not showing at least half my bonus as gross income on Sch I put me in the neg for disposible income and the trustee wouldn't go for it. I was hoping they would so I could do a 7. My bonus at the time was 40% of my annual salary. At this point though now that my actual bonus I rec'd was so far less then what we included in Sch I, it again should be me in the neg for disposable income and I'm hoping that's enough to convert.

[newbie2]

I would talk to your attorney ASAP about converting to a Chapter 7. You now have no disposable income and are 2 months behind on your mortgage. If your bonus was the only thing kicking you in to a 13 then you need to re-group and reassess. Call your attorney please this week, and good luck to you.