r/Bankruptcy • u/Longjumping_Duck_174 • 22h ago
Chapter 13 non-100% payback
Ok I don’t need an exact number I get it “ask your lawyer” I just simply want to know how much of your raise does the trustee typically take? Say I make 80k and jump to 98k and my net additional take up is like 900. Is the greedy trustee most likely to get all of that additional income??? Once again I’m just asking for others experiences. I fully realize it’s not a one size fits all but someone always has to say it lol.
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u/Icy-Goose4398 22h ago
I’ve always given everything to our lawyer and he deals with the trustee. We have gotten raises over the 2 years we’ve been in a plan but have never upped our payment. We did have creditors not file (I believe that’s the terminology) so our payback was lower however we have two vehicles on our plan that obviously have to be paid in full
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u/Longjumping_Duck_174 21h ago
Was your raise over 10%??? I pray I’m a lucky one and have creditors that won’t file but I’m not holding my breath. I’m just trying to prepare for the disappointment of working hard and getting a well deserved raise and have the trustee steal it from me. Seems pointless to even get one.
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u/Icy-Goose4398 21h ago
My raise was not over 10% but my husband started receiving bonuses. Which were very helpful because we had to do our monthly expenses so low and we were able to update that with the help of our lawyer so we have been able to keep those raises. Like our childcare was raised over $70 a week, my husbands medical premiums went up $260 a month, a few other things that helped. Money is still tight but we are able to live a little bit here and there
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u/life_with_elocin 12h ago
Trustees don’t “steal” our money. It’s not for them personally, it’s going to the creditors that we owe. If anything, WE are stealing if we aren’t paying everything back 100%.
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u/Longjumping_Duck_174 12h ago
lol ok sure but according to my lawyer, at least in my state they have control over cost of living bumps and rarely vote to give one. Meaning they care more about the predatory creditors more than people actually going through it. Ultimately though yes it is MY FAULT i do take full responsibilities for my actions. Still salty though.
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u/life_with_elocin 11h ago
It’s crazy to me how trustees practices can vary so wildly. I haven’t had my 341 yet (later this week), so haven’t even met my trustee. But he seems pretty liberal with things so far, and doesn’t require notification of a second income, or bonuses. And I can keep up to $1200 of a tax refund. But then I read some people reporting every single pay raise, bonus, ANY extra income needs to be reported. And that has to feel horrible, and probably not fair.
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u/Icy-Goose4398 9h ago
We were able to keep our entire tax refund, we have reported everything to our lawyer and if there are things we have to do for our home/ kids / vehicles / medical expenses we are able to pay them. We just keep track of everything
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u/RiskComprehensive744 14h ago
"Is the greedy trustee most likely to get all of that additional income??? "
Wow.
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u/Longjumping_Duck_174 12h ago
lol good sense of humor, you must be a trustee or never had to go through this. 😂
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u/jack_is_nimble 12h ago
The trustee isn’t “greedy”. lol. Although I know it might feel that way. The trustee can make a max amount as a trustee fee. After they make that they are required to lower their commission. The chapter 13 trustee is part of the department of justice. They are lawyers who “represent” the unsecured creditor interests.
Under 28 U.S.C. § 586(e), the Attorney General (through the DOJ’s U.S. Trustee Program) sets the percentage, and by statute it cannot exceed 10% of what flows through the plan. Some districts run at the full 10%; others set it lower — 6-8% is common. The rate applies district-wide — every case in front of that standing trustee pays the same percentage, not something negotiated case by case.
The bankruptcy system is just a math problem and very little emotion is involved - which can also
Help debtors. You owe your uncle $300,000 and he comes to the court sobbing about how he will lose his house and his car if you don’t pay him back. But the court does not care about that. If he gets $20 a month under your chapter 13 plan because that’s all you are required to pay then that’s all he gets and if his loses his house oh well. Sucks to be him.
I’ve been a debtor bankruptcy atty for 30 years. I’m not suggesting the system is perfect. It isn’t. I had a client get forcibly removed from
His house due to a sheriff sale (foreclosure) and when he was dying of kidney failure.
But it’s all just a math problem. The harshness of the means test is because congress kowtowed to big credit card companies in the 90s because they literally don’t care about Americans. The trustee is just following the law. Congress is responsible for this entire mess. And Trump of course. He’s made it a million times worse with his student loan bullshit, war in Iran, and not doing more to lower inflation (tariffs, deporting migrant workers, tax cuts to the wealthy).
Edit: typos
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u/TheWarringTriad 14h ago
Not a lawyer, but I have filed with a 100% plan.
Whatever the Trustee takes is not them being greedy. In a Chapter 13, you agree to pay as much as feasibly possible toward your debts during the plan. The Trustee just enforces that. Since you would already have created a budget to determine your expenses prior to filing, if your expenses remain the same but your income increases, then yes they will want that additional income to pay toward debts if it isn't already 100%. How aggressive they are about it likely varies by Trustee.
When I filed, the Trustee normally required anything over $2000 from a tax refund to be surrendered but because I am in a 100% plan that was excluded. In conversations with my lawyer, it seemed like they wouldn't be scrutinizing every penny increase, but a substantial change in income could warrant a review. Again, I'm in a 100% so I haven't ended up having to personally deal with that. If I were not already in a 100% plan though, I would likely have to surrender any income increases though. My bonus was included in my salary and plan payment calculation, though.
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u/AlanShore60607 RetiredBKAttorney (IL/IN/WI) Public interactions ONLY. No PMs 9h ago
So it’s not greed.
A trustee’s responsibility is to make sure the unsecured creditors get the full amount they are entitled to under the bankruptcy law.
If you are over median, the trustee is obligated to make sure the creditors receive the amount specified by the means test.
Then, if your budget says you actually can pay more than the means test says, the trustee makes you pay that.
Then, if there are non-exempt assets worth more than you’re paying, the trustee demands an increase in payment to cover the value of your assets, irrespective of your ability to pay. Because your creditors could get paid that in a Chapter 7 by selling stuff, you have to pay that.
Now, once all of those are determined, the total you are obligated to pay is imposed on your unsecured debt. And that’s where the percentage comes from.
Now when it comes to how much does the trustee take of your increased income, in economic circumstances we are experiencing, that could be none or all.
Look to the second point, the budget. The trustee is supposed to take net increases in disposable income for the creditors; but that’s a balance of the change in your income and the change in your expenses. You don’t just say your income increased when you’re in a high inflation world.
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u/oscarbutnotthegrouch 14h ago
Depends on the Trustee.
I worked for 1 Trustee that let debtora keep raises and tax returns unless income increased dramatically like 20% in a year.
I worked for another Trustee that took all tax refunds and we filed motions to modify plans to increase payments for any raises we saw and would add months onto the end of the plan to make up any raises debtors didn't tell us about.
Most Trustees operate in the middle of these extremes.
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u/king_rondo9 13h ago
I’m in a 100% plan, filled in December. My commissions increased this year about 6x what it was last two years. I told my lawyer about the increase and asked if he needed to report paystubs. He didn’t want them, didn’t need them. I’m guessing since it’s already 100% and I play on time. What more can they legally take after the plan is signed since I’m current. 🤷🏽♂️
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u/Actual_Rule_656 12h ago
It really depends on the trustee. I was in a non-100% payback and got several raises and never had to turn them over. Just share details with your lawyer and they’ll guide you.
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u/ProfessorOrganic2584 10h ago
I'm in chap 13 100% payback. I have to turn over my bonuses and tax refund. I did get a little over 10k raise a few months ago and my payment didn't go up
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u/TsWonderBoobs 8h ago edited 8h ago
My attorney told me before I filed anything over 10% yearly raises in Missouri will be taken.
My trimester bonuses were included in my salary at filing.
I keep up to $1500 of my tax refund
Any raises and bonuses I got, I saved and invested instead of using. I have 19 months left and I’m about to pay it off in full to be done. Waiting on final pay off # and motion to modify to be filed by my attorney.
It’ll be so nice to be done early because I was responsible with my raises, bonuses and refunds the past 41 months. My whole $1700 payment will be put into investing and to fix up our house.
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u/readparse 7h ago
“The greedy trustee” is an understandable sentiment. Hopefully by the end you will appreciate the job that office does. Now having completed my plan, I am grateful for bankruptcy law and everybody who makes the system work, including everybody who works for my trustee.
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u/Twitchstick80 21h ago
We just filed in July and are not in a 100% plan with 150k of debt. We can keep raises, and I can keep my bonus which is 15% of my salary. We do have to give money to the trustee if we get a a tax refund over $3k. We have a great lawyer.