Income Increase During Bankruptcy

The word bankruptcy has a serious stigma attached to it, but in reality the process provides a great deal of hope for the future. Bankruptcy offers borrowers burdened with debt a fresh start and a plan to tackle their financial issues. While it may be a stressful and a complex process, the benefits of filing bankruptcy are enough to outweigh the hoops and hurdles the court may require. One aspect of bankruptcy many don’t think of when they’re about to file is what happens if your income increases during proceedings.

It’s no surprise that your actual income during a bankruptcy proceeding is incredibly important information. If your employer increases your income during bankruptcy, then it could alter your rights under the law or your required debt payments. That is why it’s imperative you have secured an experienced Cincinnati bankruptcy lawyer to help you handle bankruptcy proceedings correctly and efficiently. They can determine if you should disclose your income increase to the court as well as guide you through the bankruptcy process.

Cincinnati Attorney Explains Increases in Income During Bankruptcy in OH

Bankruptcy laws are extensive and can be quite complicated in some areas. Many aren’t aware of the laws regarding income, taxes, and other important factors during bankruptcy. This can lead to mistakes which can gravely harm an individual’s bankruptcy proceedings. For these reasons, it’s highly recommended you seek an experienced bankruptcy attorney as soon as possible. They can review your case and determine what the next best step is to secure your future financial freedom. 

Steiden Law Offices is a reputable firm with over 15,000 successful case filings. Ohio bankruptcy attorney Eric Steiden and his team take a proactive, aggressive and thorough approach to each client’s case. With over 26 years of experience, debt relief attorney Eric Steiden understands what it takes to resolve outstanding debt. You can reach Steiden Law Offices at to set up your first consultation free of charge.

Steiden Law Offices accepts clients throughout the greater Kentucky area including Robertson County, Mason County, Grant County, Pendleton County, Bracken County, Kenton County, Boone County, Campbell County, and Gallatin County. 

We also represent clients in Ohio such as Butler County, Clermont County, Warren County, Clinton County, Montgomery County, Greene County, Champaign County, Clark County, Brown County, Adams County, Lawrence County, and Scioto County, Ohio.

Information Center:  

Back to top

What Happens if My Income Increases During Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is what most people think of when they hear someone is going bankrupt. Essentially, it’s a way for a borrower to wipe their state clean. During Chapter 7 bankruptcy, a trustee will eliminate all or most of your debts, and possibly sell some of your assets along the way to pay off other debts. Many borrowers with an income choose this type of bankruptcy as it allows you to pay off your debts relatively quickly, usually within six months.

If you are in the middle of a Chapter 7 bankruptcy proceeding and your income increases, it’s important you get in contact with an attorney as soon as possible about whether you should inform the court. A substantial enough income increase could cause the court to alter your bankruptcy plans and failure to report said increase may result in criminal charges. It’s also possible the increase in income may not change your original bankruptcy plan because Chapter 7 bankruptcy is based on your financial circumstances at the time of the filing. The trustee may not have any right to the new income after you’ve already filed it.

If you were entitled to an increased income when you filed for bankruptcy, then it’s considered a part of the estate. Income generated from the estate’s equipment or other possible assets can also be utilized by the trustee to pay off your debt. In some cases, a significant income change may require you to transition into Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. This will heavily depend on where you are at in bankruptcy proceedings, the provisions of your bankruptcy, as well as how much your income has increased.

Back to top

What Happens if My Income Increases During Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is designed for those with a steady income who can afford to pay off their necessary expenses, but not enough to pay off all their debts. If you file for Chapter 13 bankruptcy, you will retain most of your assets and most of your debts will be discharged. You will then be given three to five years to pay off your debts in a set schedule rather than the original date that was determined by creditors.

During Chapter 13 bankruptcy, the amount you are required to pay is based on your income minus necessary expenses such as utilities, food, medical care or a loan payment. All disposable income will go towards your liabilities until all remaining debts are paid off. If you get a raise or a new higher paying job, then this information may need to be disclosed to the court. A greater income may require you to make higher payments towards your debt.  

Normally, disclosure of an increased income matters based on the language of your bankruptcy plans. In some cases, borrowers aren’t required to disclose their change in income. It depends on how drastically their income increases and whether their necessary expenses increased as well. If you only received a minor raise or the greater income doesn’t result in an increase in your disposable income, then the trustee may not seek a change in your repayment plan.

Back to top

Penalties for Failing to Report an Income Increase

It’s important that you thoroughly investigate your bankruptcy plans to see if you should report an income increase or not to the court. If you are required to do so and fail, then your bankruptcy case could be dismissed, and you will be back with overwhelming debt with no options. The creditors can now execute their right to demand payment on their own schedule instead of following the plan laid out by the court.

In severe cases, you could even be charged with bankruptcy fraud, which is a criminal offense. The penalties for bankruptcy fraud will depend on the facts of the case, but a conviction could result in outstanding court fines and even imprisonment. That is why it’s extremely important you seek an experienced bankruptcy attorney if you’ve had a sudden increase in income. They can review the details of your bankruptcy plans and determine if disclosure is required.

Back to top

Additional Resources

Learn the Basics in Bankruptcy – Visit the official website for the United States Courts to learn more about the basics of bankruptcy law for both Chapter 7 and Chapter 13. Access the site to learn more about what debts can be discharged, liquidation and how it works as well as the steps to bankruptcy court. 

United States Bankruptcy Court – Southern Ohio – Access the primary website for Cincinnati Bankruptcy court for residents and surrounding areas. Visit the site to learn more about the  judges, locations, phone numbers, FAQ s, means testing, filing and seminars.

U.S. Bankruptcy Court, Southern District of Ohio
Cincinnati Divisional Office
221 E. Fourth Street
Cincinnati, OH
(513) 684-2572

S. Bankruptcy Court - Eastern Kentucky– Visit the official website for the Eastern District of Kentucky Bankruptcy Court and read up on their procedures for bankruptcy. Access the site for information on new standing orders, locations, mission statements, judges, processes, opinions and frequently asked questions.

U.S. Bankruptcy Court, Eastern Kentucky
100 E. Vine St. Suite 200
Lexington, KY 40507
(859) 233-2608 

Back to top

Cincinnati Bankruptcy Lawyer Explains Income Increases in OH

During bankruptcy proceedings, there are many moving parts and failure to manage all of them could hurt your finances even further. It’s important you take the correct steps to resolving your financial debts by hiring an experienced and skilled bankruptcy lawyer for assistance. A knowledgeable attorney will make the necessary bankruptcy filings for you and ensure every aspect of that filing is reviewed and addressed properly.

Unsure where to turn? We recommend you get in contact with Cincinnati debt relief attorney Eric Steiden and his team at Steiden Law Offices. With thousands of case filings under his belt, Bankruptcy attorney Eric Steiden knows what’s required to resolve outstanding debt. He can draw from both his experience and extensive resources to provide excellent representation and legal counsel for you. Get in contact with Steiden Law Offices by calling . We practice throughout the greater Ohio and Northern Kentucky area including Blue Ash, Montgomery, Edgewood, Elsemere, Villa Hills, Covington, Erlanger, and Fort Mitchell

Back to top

Ask the Attorney for a Free Case Review

* All fields are required.

Make a Payment Online Pay Online
Convienient Office Locations
Cincinnati, OH
830 Main St #401 Cincinnati, OH 45202
260 Northland Blvd #129 Cincinnati, OH 45246
Covington, KY
411 Madison Avenue Covington, KY 41011
Florence, KY
6900 Houston Rd #21 Florence, KY 41042
Maineville, OH
2263 W US 22 and 3 Maineville, OH 45039
4030 Mt Carmel Tobasco Rd #327E Cincinnati, OH 45255
West Chester, OH
8050 Becket Center Dr #131 West Chester, OH 45069