Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

How a pay raise affects bankruptcy

When Tennessee residents are having trouble paying their bills, there are a few options for debt relief available. Bankruptcy is sometimes the best way to clear debts and begin rebuilding credit. There are two primary types of bankruptcy filing for individuals. Financial changes that happen after the bankruptcy filing may have some effect on the proceedings.

Chapter 7 is a liquidation bankruptcy that involves the liquidation of a debtor's non-exempt assets with the proceeds being used to repay creditors. There are income requirements to qualify for Chapter 7 bankruptcy. Someone who does not qualify or who wishes to pay a portion of their debts back without liquidating assets could file for Chapter 13. This is a repayment plan that creates affordable payments that the debtor must pay for a certain period of time, after which much of the remaining debt is discharged.

If someone who has filed for Chapter 7 bankruptcy gets a raise in pay or has another increase in income, the case is not affected. However, the situation is different with respect to Chapter 13. A portion of the increased income must be surrendered to the trustee and the monthly payment adjusted. This is because the repayment amount is based on the debtor's ability to pay. However, it is possible that the trustee will not choose to file a motion to increase the payments.

Bankruptcy is designed as a way for someone who is in debt to get a fresh financial start. Chapter 13 is designed for people who have a regular source of income, and in some cases it can allow them to avoid foreclosure and keep their homes. There are eligibility requirements that an attorney can outline.

No Comments

Leave a comment
Comment Information

We Look At Your Case From Every Angle To Find The Solution That Is Right For You

Bankruptcy help for everyone, from the most simple to the most complex cases.

Call Us Now To Schedule A Free Initial Consultation

Contact our Nashville office at 615-686-2279 or our Cookeville office at 931-400-2218. You can also reach us via email to set up a time to talk to us about your debts.

Get Legal Help Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
Nashville Law Office Map

Cookeville Office
312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
Cookeville Law Office Map

Back To Top