What if you get a raise on a 13?

[mydebtsucks]

How many months is a 13? I know it depends on your expenses, but is there an average? I saw 36, 60 and I swore I saw 144? Also, Can they increase the amount you have to pay if you get a raise?

[Peevee]

36 months is a minimum and 60 is the maximum, and yes they can raise your payment if you get a wage increase

[SinkingFast]

Depends on the size of the raise whether they'll even bother or not.

If you're talking cost of living, 4-5% type deal, then don't sweat it.

If you get a hefty raise of 10-12% or more, then contact your attny and let them know about it. If the pay raise is significant and you don't have an substantial change in expenses to offset the raise, your plan may be adjusted.

Example,......... You're a shop steward in a manufacturing facility and the company promotes you to a Sales position in the office. The new job comes with what appears to be a 25% increase in pay. But, now you have to wear nice clothes to work. Possibly even coat and tie, or suits. You need to have your shirts professionally laundered, pressed, and starched. Those type expenses eat away at the raise pretty quickly.

As opposed to you were a line supervisor before and get promoted to shop steward type thing. You'll continue to wear comparable clothing to work. So increases in expenses are negligible.

Just a couple examples, but hopefully you get the idea.

Even in the 10-12% range, some Trustees will adjust the plan while others won't. Varies case to case and Trustee to Trustee.

[13inOR]

We were told a raise over 10% must be reported, but even then, like SF said,
whether or not your payment increases will depend on whether the new job brings more expenses or not.

[13inOR]

Actually, 36 months is not ALWAYS the minimum, but it is kind of the magic
number so to speak, as those who are in a less than 100% plan must pay for at least 36 months if they want to pay off early, or they will have to pay off 100% of debts whereas they may have only had to pay a small percentage.

Basically, you cant get out of your chapter 13 before 36 months unless you pay 100% of your debt.

Our plan was only for 29 months, because we had enough disposable income that we were set up to pay back 100%, and it wasnt enough to last 36 months. We paid off early in month 19 by refinancing, but we were paying back 100% anyway so no loss, it just got us out of the $1300 monthly payment to the trustee that much sooner!

[mydebtsucks]

So why did you go through bankruptcy and suffer the credit damage if you could pay it off in that time anyway? I myself want to pay my debts as well, but I suspect you did it for the interest charges they were killing you with. That's my problem too is that they never go away. As I've posted before, it's the compounded interest that is killing me.

One other question, I sometimes work as an independent contractor. If I do a 13, and I stop doing all this extra work, (it is killing me working two jobs) will the amount I pay go down? Should I quit working two jobs and wait 6 months to file? I guess the same applies for pay cuts at work. What exactly are those rules in that situation?

[13inOR]

If you are referring to me, I can explain why we did it. Due to several surgeries and loss of wages, and poor planning, we were several months behind on our mortgage. We got a letter stating they would no longer take
anything less than the total amount due.

Now, at that point we were able to double up on our house payments but that was all. So because losing our home would have been a very bad financial move due to loss of a lot of equity, chapter 13 was our only recourse. We didnt have a lot of cc debt, that wasnt our problem, It was
mortgage payments and medical.

We filed, got the payments caught up through the chapter 13, and never regretted it for a moment. Our situation is different now, and we are able to pay everything just fine.
Like I said earlier, we had enough extra to double up to catch up the mortgage, but that wasnt an option. But we did have enough disposable income to pay off in 29 months.

It was well worth everything we have gone through to hold the mortgage company at bay till we got our bearings. As you know, several 60 and 90 day lates dont exactly make your credit look great either, and believe it or not it actually started improving a little even during the bk because we got caught up and had current mortgage payments reporting.

Almost everyone that reads my posts asks why we filed in our situation,but chapter 13 can be a very good way to stop foreclosure if you are able to make your regular payments and just need a little time to get caught up without creditors breathing down your neck every minute.
NO REGRETS HERE!!!!!

[mydebtsucks]

Well I am glad you made it through it then and made that decision. BK was made for people like you who want to do the right thing, but stuff happens! You're right!
Do you know what happens if I take a pay cut? Like stop working two jobs and actually enjoy life for once? Will my 13 payments go DOWN? Thanks!

[Minnymouth]

If you are working 2 jobs now in a Chapter 13, and decide you don't want to work so hard....... well, trustee could frown upon that......
Now if you have not filed yet...... quit the second job (example - health reasons), wait 4 months and then file.......
Any change in your income up or down needs to be notified to the Trustee so your payment can be adjusted...

[13inOR]

I think Minnys right, the reason for quitting would have to be a good one or it might backfire! But I dont blame you for not wanting to work 2 jobs.

[simonhall]

mydebtsucks: You can stop working in excess of 40 hours per week any time you please. You said it yourself, two jobs is killing you.

It only makes sense then, that in spite of your extreme efforts to pay your creditors, you finally gave up and filed the bk.

It is well established in bk case law that a debtor is under no obligation to work more than 40 hours per week, even if he was doing so before the bk.

[aa06a47]

I just got a meager (less than cost of living raise) from my boss today. Should I report is as an increase in income?

[13inOR]

only if its more than 10%.

[Jenny]

What field gives 10% raises? I had a great annual review, and I got a 4% raise. That's at the high end of the scale. Last year with budget cuts, I got a 2% raise.

[aa06a47]

If you get a promtion, you will sometimes get a 10% raise. If you add my last 5 years of raises, it wouldn't add up to 10%. I work in auto business, I do remember when times were good.