Chapter 13, is there any reason to try to earn more money while in a Chapter 13 plan?

[ForsakenBK]

I am starting a new position where I have the opportunity to earn bonuses of about 10% to 15% of my base salary. This will require hard work and effort. Is it worth it to try to get the bonus if it is all going to be taken away by the trustee?

If I get a job offer that pays over 20% or more, should I take it if the trustee is going to take the entire increase?

[justbroke]

It depends. If you're in a 100% Chapter 13 plan it would not be a waste of time. In most districts, showing an increase in pay of less than 10% will usually not trigger a motion to modify your confirmed plan.

Whether or not the money would go into a Chapter 13 also depends on if your conditions changed. So it's not easy to say if a 20% increase in salary would mean that all the additional money went to the Chapter 13. There are taxes to consider and the debtor's attorney will typically do a new Schedule I/J (and maybe a new Means Test as well) to get the current up to date expenses and income.

So, it depends on many factors. I would expect the Trustee to be notified or be "interested" when where is 10% of more increase in income. That's for a less than 100% plan or one in which the increase would not get it to 100%.

Personally, I would not work harder if the money is just going to the unsecured creditors. It's not that I don't want to pay them back. It's that I don't want to burn myself out trying.

[shipo]

ForsakenBK, I was not in a 100% plan and received 6 bonuses, five raises, and one promotion during my Chapter 13; not counting the bonuses, my salary grew 39% between filing and discharge, and the only time I needed to pay extra was when I got a larger than expected tax return and had to give the Trustee all monies in excess of $1,250.

[ForsakenBK]

Did you inform your attorney or the trustee of these bonuses and raises?

[shipo]

My attorney knew going into the bankruptcy about both my annual raises as well as a target 10% annual bonus; I'm pretty sure I also alerted her to my promotion which featured a 9% bump in pay. Regardless, all extra monies I earned I shoved into my 401(k), so by the end my taxable income over the 5-year span never varied more than about $2,500 either way of my first year. I was contributing 6% when I filed in 2015 and by the time I got my discharge I was contributing at the annualized rate of $26,000, the IRS max for my (over-50) age. The Trustee saw my tax return every year and never said a word about the extra non-taxable income.