A Chapter 13 repayment plan is a court approved plan which is created by the individual filing for bankruptcy that outlines income, debts, and a plan to repay debts over a three to five year period. The payment plan is administered by the Chapter 13 trustee and is designed to allow the debtor to keep enough of their income to cover necessary living expenses and distribute all disposable income amongst creditors.
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Cost of living increases will be monitored by the trustee. If income increases significantly and the filer’s spending increases significantly also , the trustee may look at a filers expenses to see if they fall within normal basic expenses. In general, if you begin making more money while paying on a payment plan, it is not acceptable to use this increased income to try to improve your quality of life or lifestyle.