How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask cfortunato Your Own Question

cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
14232603
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

I am in a ch 13 bankruptcy, I understand I must surrender any

Resolved Question:

I am in a ch 13 bankruptcy, I understand I must surrender any tax returns to the IRS. Does this money reduce the amount I owe in the repayment plan, or is this just "extra" money distributed to the creditors?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi JACustomer,

Customer:

hi

cfortunato :

Unless your plan is paying 100% (to unsecured creditors), any tax return refund received after your Chapter 13 was filed is extra money distributed to unsecured creditors.

cfortunato :

In other words, unfortunately, that refund does not reduce the amount you owe for your plan payment - which can basically be reduced only if your income is reduced or if your allowable expenses increase.

Customer:

ok and one other thing, if I get a raise at work or have the opportunity to pick up some overtime, will the trustee see this and next year make me pay more into the plan (ie working extra for nothing) I am hoping to work more this year and start an emergency fund but not sure how this works

cfortunato :

Most trustees ask to see the debtors' federal income tax returns every year - at least in the first few years of a Chapter 13. In general, if and only if, the income on your tax return increases by more than 10%, the trustee can demand that your monthly plan payment be increased to reflect your increase in income.

Customer:

does this happen often, as in if i make 12% more should i expect to hear from the trustee? i would hate to put in a bunch of extra work to just get burned and be forced to pay more and hence forced to work extra to pay the increased payment

cfortunato :

In most cases, when a debtor's income changes, the debtor's income decreases. However, you can definitely assume that if your take-home income increases by 12%, the trustee will want the increase.

Customer:

ok is the 10% increase year to year? or is it 10% over the entire plan, I would hope cost of living increases etc would be considered.

Customer:

also to clarify, hypothetically if my year over year increase in net pay of 13 % would the trustee demand the 3% (over 10%)

cfortunato :

No - you would not necessarily pay the increase over the entire plan period. Nor would you have to pay the increase if your income went back down for the following year. In other words, if your income increased by 13% for 2013, but then went back down, your plan payment would not increase at all.
Any increase has to be based on your current income going forward, not what you earned in the past year.

cfortunato :

And yes, before there could be any increase in your plan payment, the trustee would also have to take into account any allowable increase in your expenses.

cfortunato :

But yes, if your income going forward increased by 13%, and with no corresponding increase in allowable expenses, then the trustee can ask for the entire 13%.

Customer:

ok, 2013 is the first year of my 5 yr plan, if my income in 2013 increases 10% or less the trustee will probably not say anything?

cfortunato :

Trustees usually will not change the plan payment if the debtor's income increases by less than 10% - but they can change the plan payment.

Customer:

basically my finances are a mess (obviously) and I made the mistake of waiting to file ch 13 untill I had absolutely zero savings left. I need to start saving and establishing an emergency fund.

cfortunato :

You or your attorney, if you have one, can ask the trustee beforehand what his or her policy is regarding the amount of increase in your earnings that you would be allowed without having your plan payment increased.

Customer:

ok thanks

Customer:

it wont let me rate you, says ur not finished

cfortunato :

You're welcome!

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and 3 other Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.
 
 
 

Related Bankruptcy Law Questions