When you go through Chapter 13 bankruptcy, you make a plan that works for your finances while being acceptable to your creditors. Life circumstances can change though, and sometimes they can even change in a positive way. After years of financial struggle, let’s say you finally got a raise. Does this affect your plan? It can, and that is why it is wise to keep a Bergen County Chapter 13 bankruptcy lawyer around to answer your questions.
What Should I Do When I Get a Raise?
When you get a raise you have to talk to your bankruptcy lawyer right away. They can report this to the bankruptcy trustee and tell you if anything else needs to be done.
You have to do this or your bankruptcy trustee could decide that you are not meeting your obligations. This can result in a dismissal of your Chapter 13 case, and you do not want that. It means that your debts will not be discharged through the bankruptcy process. So you may have a bit more money coming in every week, but the attempt to hide it can end up setting you back significantly.
There is also another little thing to keep in mind. Not reporting your increased income could result in a charge of bankruptcy fraud. A conviction can mean heavy fines and some jail time.
Can I Keep My Extra Money When I Get a Raise?
Now, just because you have to report a raise that does not mean that all that extra money will have to go to your creditors. Whether or not your plan and what kind of payments you have to make will change can depend on a few factors. You could:
- Have language in the repayment plan concerning how income increases affect your payments
- Be close enough to repaying your creditors that the extra income does not matter
In the latter situation, you may be able to work out a deal where you pay off your creditors slightly faster. This is rarely a necessity though.
What Are Some Other Smart Times to Talk to My Bankruptcy Attorney?
It’s smart to talk to your bankruptcy attorney when you get a raise, but that is not the only thing that could end up affecting your Chapter 13 bankruptcy plan. You will also want to schedule a meeting with your lawyer if:
- You get a bonus from your job and such bonuses were not factored into your plan already
- You get a tax refund
- You have income from a side gig or freelancing job
All of this should be reported to your lawyer so that your agreement can stay intact.
Contact Our Law Firm Today
If you are thinking about declaring bankruptcy, you do not have to handle the paperwork and the process all on your own. Instead, contact the Law Office of Boyd & Squitieri and learn more about what our experienced legal professionals can do to help you. If bankruptcy is your best option, we’ll help you make a deal.