If you get a raise at work, you may think that this is nothing less than great news. This is especially the case if you are currently undergoing a dire financial situation that prompted you to declare bankruptcy. However, you may have the smallest worry that your increased income may harm your ability to follow through in your Chapter 13 bankruptcy proceedings. Continue reading to learn the impact a raise might have on your bankruptcy filing and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can assist you in this reporting process.
What happens if I get a raise during my Chapter 13 bankruptcy?
The short answer is that getting an increase in your wages does not mean you no longer qualify for a Chapter 13 bankruptcy. But this is so long as you report this change in income to your bankruptcy trustee. This is so your trustee can properly factor this into your three- to five-year debt repayment plan. In other words, they may use this extra money to help pay back your creditors.
However, if you are already on track with your repayment plan, then this income increase may not have any effect on it. This is unless you personally wish to use these extra funds to expedite your repayment process.
Of note, you may not have necessarily gotten a raise in your annual salary; but rather you have come across another source of money or income. Nonetheless, you must report any of the following instances to your bankruptcy trustee:
- You have received an annual bonus from your employer.
- You have received your annual tax refund.
- You have received an inheritance from a loved one who has passed on.
- You have received paychecks from your side job or freelance work.
How can an attorney assist me in reporting my raise?
To reiterate, it is pivotal that you report your pay raise to your bankruptcy trustee. This is regardless of how minuscule this raise may be in comparison to the debt you still have to pay off. Ultimately, a failure to do so may lead to the following consequences:
- Your bankruptcy trustee may have your Chapter 13 bankruptcy filing dismissed altogether.
- Your bankruptcy trustee may not discharge your eligible debts (such as medical bills and credit card debt).
- Your bankruptcy trustee may have you charged with the crime of bankruptcy fraud (which comes with significant prison time and fines).
Rest assured, an attorney may formally disclose your pay raise on your behalf so that you avoid any of the aforementioned penalties. At the end of the day, this must be reported as soon as possible. So call a skilled Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. today.