Should my wife seek employment while were in Chapter 13, is it worth it?

[chp13]

So I'm a few months into Chapter 13, 60 month plan. I'm employeed and my wife stays home. Prior to filing our plans were for her to seek employment once my 5yr old started school, but that's all changed now. My wife wants to work but now my concern is if its even worth it. I assume that any money she makes will cause the trustee to raise our payment thus making her income pointless?

Any advise please?

[greenthinker]

It depends on how much she earns and how much room there is for your payment to grow. I'm assuming that your plan is currently less than 100% payback to your unsecured creditors. Using hypothetical numbers, if you are $500/month shy of paying 100%, then the trustee could theoretically raise the payment by $500/month, if your wife started bringing in at least that much. But, if she started bringing in $1500/month, then you would still be $1000/month ahead. So, whether or not her income would be pointless depends on several variables. Ultimately, you would want to consult with your attorney about this, but hopefully you get the idea. Best of luck!

[chicagoed195]

If the only reporting you are required to do to the trustee is supplying a copy of your tax return, then it wouldn't be until next April that he would have any clue your situation had changed. Given that it is already July, the impact on your overall income probably won't be too high and might not give rise to any adjustment. According to my attorney, any modification of a plan will only be prospective, that is they will not be able to change your payment retroactively.

From a planning perspective, an even better plan, if feasable, would be for your spouse to defer accepting employment until January 2012. That way, it most likely would not be an item that the trustee would be able to discern until April 2013.

If you are in a 100% plan and the trustee figures it out and wants to modify the plan for an earlier payout, that wouldn't necessarily be a bad thing. If you are not in a 100% plan, and the trustee proposes a modification and you are unable to shelter her earnings with legitimate deductions, then simply have her quit. The plan still has to be feasable and will still have to be based on what is, not what was.

[despritfreya]

Unless you were required to pay 100% of all allowed claims there is no incentive for your wife to begin working. You are required to report changes in your income and expenses (other than your typical minor COL adjustments). The more disposable income the higher the Plan payment. Assuming your Plan has not been confirmed (only a few months in) I would not recommend any changes at this time. Once your Plan is confirmed and the Trustee theoretically is no longer looking, you may be able to get away with it but, again, you are required to report (many, I suspect, ignore this). Remember, however, if and when the Trustee (or a creditor) figures out that you have the ability to pay more, you could be forced to modify the Plan. While it is doubtful that such a modification would be retroactive to when the change occurred, that is always a possibility.

Des.

[chp13]

Ok, just spoke with my attorney and you guys are all correct. My plan is at 58% w/ a monthly payment of $300 for 60 months. He said if she were to make $3,000 a month my payment would bump up to 100% and I could keep the plan at 60 months or shorten it or pay it off at any time. So I think I'll have her wait until January so we can maximizes the her income.