If My Income Increases, Do I Have To Amend My Bankruptcy Petition?

15 Apr If My Income Increases, Do I Have To Amend My Bankruptcy Petition?

It is unlikely the bankruptcy petition has to be amended if your income increases after the case is filed. This is because the bankruptcy petition, which is a document whose accuracy you have verified under penalty of perjury, is supposed to accurate as of the date you signed it, and as of the date the case was filed.

The bankruptcy petition is not required to be amended after filing every time something changes regarding your debts, assets, monthly budget or anything else. (The sole exception is inheritances arising in the 180 days after filing the case.) Otherwise, you would be amending your bankruptcy petition every hour after filing the case, forever, as your bank balance changes, your cash on hand is spent, your house payment changes, you buy a different car and junk the old one, you pay your dentist for the small bill you listed in the bankruptcy, and so on.

Accordingly, if your income was listed correctly on Schedule I as of the time of filing the case, you have no duty to amend your petition, even if your income increases. However, keep in mind that Schedule I contains a question asking for any increase or decrease in income that you anticipate in the next one year. If your income does increase shortly after filing, and you anticipated that could happen, then that fact should have been noted on Schedule I. If it was not, you have a duty to correct that misstatement by immediately amending the petition.

Also, at the meeting of creditors (which usually occurs about thirty days after filing), the trustee will likely ask you under oath if anything has changed since the date the case was filed. Thus if your income has increased you probably will have to tell the trustee about it at this meeting. After such a disclosure, your lawyer may decide as a tactical matter that the petition ought to be amended.

Additionally, some chapter 13 plans contain language requiring the debtor to inform the trustee of any increase in income occurring during the case. If your chapter 13 plan contains such a provision, this obviously will obligate you to inform the trustee of income increases, although a formal amendment to Schedule I might not be required.

New bankruptcy law section 521(f)(4) also requires chapter 13 debtors to file tax returns, or an income and expense statement, annually, during the pendency of the case, if requested by the trustee or a party in interest. While this should not lead to an amendment of the petition, it could lead to plan modification in rare cases.

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Craig Andresen is a Minnesota bankruptcy attorney who represents both consumers and small business owners in chapter 7 and chapter 13 cases. With thirty years experience, Mr. Andresen is a frequent speaker on the topics of stopping mortgage foreclosures, and stripping off second mortgages in chapter 13. His office is located in Bloomington just across the street from the Mall of America. Call his office at (952) 831-1995 for a free consultation about protecting your rights using bankruptcy.
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