What a big change a Chapter 13 bankruptcy can make on your life! Suddenly you aren't being woken up at all hours by creditors or worrying about finding a foreclosure notice in the mail. However, in order to continue to keep this tremendous stress off your back, you must follow the Chapter 13 rules.
We've discussed one rule of these already—you must get permission before you incur any new debt. In addition to that Chapter 13 rule, you must also report any increase or decrease in your income. The Trustee and your bankruptcy attorney understand that life continues to happen while you are in a Chapter 13. Your income might go up after a promotion or might plummet after a job loss. Whatever the change, the Trustee must continue to make sure your Chapter 13 payment plan is appropriate to your current lifestyle.
An increase in income may result in a higher plan payment. Conversely, a pay cut or layoff may result in a lower plan payment. Your plan payment is not just based on your ability to pay but it may cause a change. To get the numerous benefits of filing bankruptcy, you have to make your best effort to pay your debts.
Will you go to jail for not reporting a change in your income? Not necessarily. Typically, failing to report a change will result in the dismissal of your case. That means that all the effort and time that you and your bankruptcy attorney spent getting you out of debt could have just been a waste. Can you imagine traveling all that way and not getting a discharge? I don't think I'd want to risk putting my family in that situation.
Keeping information about your income change from the Trustee means that you could be accused of bankruptcy fraud also.
The amount of challenges you need to face in your journey to a fresh start is really up to you. You can choose to follow the rules and get a fresh start for you and your family—and with the help of an experienced bankruptcy attorney, that may not be such a difficult task.
So, what's your next move? Will you stay in debt and continue to suffer under the tutelage of your creditors or will you take action?
We've discussed one rule of these already—you must get permission before you incur any new debt. In addition to that Chapter 13 rule, you must also report any increase or decrease in your income. The Trustee and your bankruptcy attorney understand that life continues to happen while you are in a Chapter 13. Your income might go up after a promotion or might plummet after a job loss. Whatever the change, the Trustee must continue to make sure your Chapter 13 payment plan is appropriate to your current lifestyle.
An increase in income may result in a higher plan payment. Conversely, a pay cut or layoff may result in a lower plan payment. Your plan payment is not just based on your ability to pay but it may cause a change. To get the numerous benefits of filing bankruptcy, you have to make your best effort to pay your debts.
Will you go to jail for not reporting a change in your income? Not necessarily. Typically, failing to report a change will result in the dismissal of your case. That means that all the effort and time that you and your bankruptcy attorney spent getting you out of debt could have just been a waste. Can you imagine traveling all that way and not getting a discharge? I don't think I'd want to risk putting my family in that situation.
Keeping information about your income change from the Trustee means that you could be accused of bankruptcy fraud also.
The amount of challenges you need to face in your journey to a fresh start is really up to you. You can choose to follow the rules and get a fresh start for you and your family—and with the help of an experienced bankruptcy attorney, that may not be such a difficult task.
So, what's your next move? Will you stay in debt and continue to suffer under the tutelage of your creditors or will you take action?
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