Filing for Chapter 13 means committing to a debt repayment plan that typically runs for three or five years. The amount you pay each month is determined at the time the court approves the plan, based on a calculation of the disposable income you have left after paying for food, housing, utilities and other costs of living. If your income increases during your Chapter 13 plan but your cost of living does not, then your payments may increase or the additional income may have to be handed over to the bankruptcy trustee.
The following are examples of additional income that might affect your Chapter 13 plan:
There may be specific language in your repayment plan that explains how income increases affect — or do not affect — your payments. Additionally, if your existing Chapter 13 plan already has you on track to fully repay all of your unsecured creditors, the court will probably not increase your payment amount. You could, however, choose to make larger payments and complete your plan faster.
No matter how much or how little your income increases, you should contact your Chapter 13 lawyer to discuss it. Your lawyer can help you report the income change to the trustee. If income increases aren’t reported, the trustee can have your Chapter 13 case dismissed, meaning your debts would not be discharged. In some cases, people have been charged with the crime of bankruptcy fraud for not reporting income increases. A conviction means heavy fines and a possible prison sentence.
Jeff Field & Associates helps clients through every phase of Chapter 13 bankruptcy in Georgia. We have offices in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale. Give us a call at 404-381-1278 or contact us online to schedule a free initial consultation.
Please fill out the form below and one of our attorneys will contact you.