Chapter 13 question


N

Nick Urfe

I've just started doing research on bankruptcy, so please
forgive me if my terminology is suspect, hopefully I can
phrase this clearly enough so that you'll know what I mean.

If my understanding is correct, in a Chapter 13 bankruptcy
you end up with an amount that you have to pay each month,
and one of the determinants of the amount is your available
income. Once that amount is set, will be adjusted upward if
your income goes up in the future? Or if you get an
unexpected windfall?

For example, let's say I'm earning $50K/year and my monthly
payment under a Chapter 13 bankruptcy is set at $1K/month.
Will that monthly payment rise if I get a raise to $60K/year
and/or if I get a $10K bonus (or even a $100K inheritance)?

Thanks for your help!
 
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B

Brett Weiss

If my understanding is correct, in a Chapter 13 bankruptcy
you end up with an amount that you have to pay each month,
and one of the determinants of the amount is your available
income. Once that amount is set, will be adjusted upward if
your income goes up in the future? Or if you get an
unexpected windfall?
The answer depends on what state you live in and the local practice of the
trustee your case is assigned to.

--
Brett

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The Small Print: This response is for discussion purposes only. It isn't
meant to be legal advice and you shouldn't treat it as such. If you want
legal advice, speak with a local lawyer familiar with your state's laws who
can review *all* of the facts and the law applicable to your situation.
*****************************************************************
 
H

Howard Goldstein

: If my understanding is correct, in a Chapter 13 bankruptcy
: you end up with an amount that you have to pay each month,
: and one of the determinants of the amount is your available
: income. Once that amount is set, will be adjusted upward if
: your income goes up in the future? Or if you get an
: unexpected windfall?

"Will it be adjusted" differs from "might it be" (or perhaps more
artfully put, "is my plan susceptible to an involuntatry upward
change?") The answer to your question _as I rephrased it_ is yes,
various partiesm might move motion to modify your plan, and should
they prevail, the plan could be changed.

: For example, let's say I'm earning $50K/year and my monthly
: payment under a Chapter 13 bankruptcy is set at $1K/month.
: Will that monthly payment rise if I get a raise to $60K/year
: and/or if I get a $10K bonus (or even a $100K inheritance)?

These hypotheticals are far too fact specific to answer on usenet. I
suggest you discuss this with experienced bankruptcy counsel, and not
only because the consequences of a wrong decision could potentially
lead to bankruptcy fraud charges if I were to let my imagination run
wild on a slight variation of the those facts...
 
N

Nick Urfe

"Will it be adjusted" differs from "might it be" (or perhaps more
artfully put, "is my plan susceptible to an involuntatry upward
change?") The answer to your question _as I rephrased it_ is yes,
various partiesm might move motion to modify your plan, and should
they prevail, the plan could be changed.
How would anyone know that my income had increased and/or
that I had run into some kind of windfall? Would I be under
some kind of obligation to revel such an event should it
happen? Will anyone (the trustee? my creditors?) have access
to my financial records on a continuing basis?
 
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H

Howard Goldstein

: >"Will it be adjusted" differs from "might it be" (or perhaps more
: >artfully put, "is my plan susceptible to an involuntatry upward
: >change?") The answer to your question _as I rephrased it_ is yes,
: >various partiesm might move motion to modify your plan, and should
: >they prevail, the plan could be changed.
:
: How would anyone know that my income had increased and/or
: that I had run into some kind of windfall?

I don't know. Is "it depends" an answer? A creditor like the IRS for
ex. would know quite easily. Perhaps you or your employer (or
depository, etc) will receive a subpoena? This is *far* too
speculative a question to answer on netnews.

: Would I be under
: some kind of obligation to revel such an event should it
: happen?

This is a matter of, amongst other things, local practice and your own
ethics. Again I suggest you consult experienced bankruptcy counsel
_in your area_.

: Will anyone (the trustee? my creditors?) have access
: to my financial records on a continuing basis?

Let's turn this around. Is some special kind of special access
required? If you get a windfall (say you win the lottery, or inherit
a million bucks) that's probably going to be in the public space. The
fact of the matter is that your plan is probably subject to
modification in the event of unforeseen budget changes (foreseen but
undisclosed budget changes carry very serious consequences). I can't
strongly enough urge that you to run, not walk, to someone in your area
who regularly practices bankruptcy law.
 

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