If you are not able to handle your financial situation, Chapter 7 and Chapter 13 bankruptcy are available for you to restructure your debt. Each year, many people discover that the bankruptcy process offers them the opportunity to rebuild their credit and have a fresh start. Unfortunately, in some situations, bankruptcy can be a particularly complex process. To make sure that this process is successfully navigated, many people find it helpful to obtain the assistance of an experienced bankruptcy lawyer.
Salary Increases and Chapter 13
Chapter 13 is often the best option for individuals who have steady income and who can afford to pay off all necessary expenses but who do not make enough to take care of debt. In Chapter 13, a court will give a person a period of time, which often ranges from three to five years, to pay off his or her debts. The amount that a person will be required to pay toward the debt is based on the person’s income minus necessary expenses.
In situations in which a person obtains a better paying jobs or receives a raise, this information will often be required to be disclosed to a court of law. Fortunately, an experienced bankruptcy lawyer can help you determine whether you should inform a bankruptcy trustee about your higher income. In many situations, a higher income will result in you being required to make higher payments toward your debt.
Chapter 7 Increases
Chapter 7 is the process most often used by people who file for bankruptcy. A bankruptcy trustee will eliminate most of your debts and may sell some of your assets to pay off debts. This process is appropriate if you have an income but are unable to cover all of your necessary expenses or can pay the basics but can not pay down your debts. If you are part of a Chapter 7 bankruptcy and your income increases, do not hesitate to speak with an experienced attorney.
In many situations, an increase in income will not affect Chapter 7 bankruptcy because it is based on your financial circumstances at the time that you filed for bankruptcy. In situations in which a person’s income increases substantially, however, the individual might be required to file for Chapter 13 bankruptcy.
Speak with an Experienced Bankruptcy Lawyer
If your income has increased for any reason, it is critical to not hide these details from the bankruptcy court. You might think that the change is not significant, but it can substantially affect your payment schedule or eligibility for Chapter 7. If you ultimately fail to report income, your bankruptcy case might even be dismissed and you would return to facing a substantial amount of debt.
No matter the reason for the change, if you have filed for bankruptcy and your income is now a different amount, it is important to quickly obtain the assistance of an experienced bankruptcy lawyer. To discover more about your situation as well as learn what steps you should take, contact the Adam Law Group today to schedule an initial free consultation.