In a Chapter 13 your plan payment will be driven by your income, your assets and your debts. Your income must be regular and sufficient to allow your repayment plan to work. Your Chapter 13 case will be assigned to a bankruptcy judge and a Chapter 13 trustee will be charged with the administration of your case. As a practical matter, your trustee will be charged with the administration of your case. Your trustee is a gatekeeper and administrator during your case and will recommend to your judge whether your plan should be confirmed (approved) or your case dismissed. One of the trustee's duties is to determine whether the income shown on your bankruptcy schedules can be documented. This is simple enough when your income is from traditional sources such as:
- Pay advices from your employer
- Pension, retirement or annuity statements
- Income from the Social Security Administration, the Department of Labor (unemployment), or some other entity, such as a workers comp check
If your income cannot be documented, it is unlikely that your trustee will recommend your case for approval without further proof of income. For example, if that income has been cash or under the table income, you must find a way to document that you regularly receive income in that amount. However in the past you may have maintained payment records (or did not maintain payment records), when you file a Chapter 13 case you enter into a new world of close scrutiny by your trustee and your judge. Some ways to document income may include:
- Bank statements
- Regularly kept record of income received
- Letter or affidavit from the person or business entity paying you with sets out the payment arrangement
If your household income includes any contribution from a family member or roommate the trustee will require an affidavit for the duration of your plan. Please contact one of our bankruptcy attorneys if you have any questions regarding the need to document income in Chapter 13.
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