Will the new trustee take into account my new job? 15 Answers as of February 06, 2012

If you reside within the jurisdiction of the Bankruptcy Court for the Northern District of Illinois (which you probably do), there is an interesting case decision that governs your situation. Judge Eugene Wedoff has previously interpreted the Bankruptcy code's requirement that Chapter 13 debtors commit all disposable income?to a plan of reorganization not to apply once that plan is confirmed. In other words, if a modification or change needs to be made in your case then it may not be necessary to commit all your newly found disposable income in order for a new plan to be put in place or the current plan to continue. Feel free to contact our office to discuss this situation in greater detail. We look forward to speaking with you.

Whether the Chapter 13 Trustee will require you to pay more in your Chapter 13 plan depends on whether you have a plan provision to update your income, and if you do, then it depends on the means test. You need to consult with an attorney before a definitive answer can be provided.

It is unusual for a trustee to modify a plan payment due to an increase in income. It is unnecessary for you to file an amended schedule I and J to reflect this changer, unless the trustee requires it.

No. But if you don't report it and the creditors find out about your new job, they will ask you to adjust your plan and make higher payments.

I would contact the attorney who filed the 13 and ask them to add the new employment amount into the plan. The trustee is going to want to take more money than he was previously but he is not going to take all of it. So your monthly payment is going to go up and hopefully you can complete you plan sooner. If you don't disclose the increased amount and the trustee finds out then he could move to dismiss your bankruptcy entirely. It is better to be upfront about your new situation than to hide it and possibly get burned in the end. Good luck.

You will have to amend your chapter 13 plan as the trustee will know as soon as you send them your required tax returns. You will have to increase your plan payments to cover any disposable income unless you are already at a 100% payment plan.

In many jurisdictions, you must report to the Trustee when your income increases more than 10% from the amount listed on Schedule I. In our office, we ask clients to report any increase (or decrease) in income to us so that we can decide whether the Trustee needs to be notified. I would suggest you discuss this matter with your attorney ASAP.

Not necessarily. If you were living on a shoestring before, you can submit a new Sch J (Monthly Expenses) that shows a reasonable increase in areas where you were just really squeaking by before. That would offset part of the wages from your new job! And congrats on the new job!

Yes. You will probably need to pay 100% of all claims because of your very high income.

Under the bankruptcy laws, you are required to inform the trustee of your new income. Now, I highly recommend to work with an experienced bankruptcy attorney to ascertain the best possible outcome for you. Technically, if you file the required paperwork concerning your increased salary, your monthly payment will go up (probably drastically) in accordance with the monthly disposable income you have available. However, an attorney might be able to reduce the monthly payment to a reasonable amount by using available and permissible expenses to reduce your monthly disposable income. In short, you need to amend your paperwork so that your monthly payment will not go up or only go up a little.