What to do if your income increases after filing Chapter 7 bankruptcy

3,373 families filed bankruptcy using Upsolve.

Written by Andrea Wimmer, Esq.  
Updated January 23, 2020

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The first thing you should do is give yourself a high five. Whether you found a new job or got a raise in your old job, getting paid more this week than last week is always a good thing!

If you’re a few months into your case, then you don’t have to do anything. If it changed shortly after your case was filed, wait for the creditors’ meeting and let the trustee know during the meeting that your income has changed. Depending on how much it changed, they may say don’t worry about it or request that you file updated forms

  • Upsolve Users: If your trustee asks you to file an amended Schedule I showing your new income, send us an email to help@upsolve.org to let us know and we’ll walk you through it/help you update your forms. 

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Potential Pitfall - Surplus Income

If your new income is significantly higher than when your case was filed, you may end up with a large surplus of money every month after paying your expenses. The first thing you should do is review your Schedule J (Expenses) and make sure that the expenses listed are still accurate. Often times folks in a Chapter 7 bankruptcy are so used to pinching each penny that they’re not actually allowing themselves a reasonable amount for expenses each month. 

If you have more than a few hundred dollars left over at the end of the month even after updating your expenses, the trustee may raise this issue with the court. That’s because even though someone qualified under the means test, the court can refuse to allow the person to stay in a Chapter 7 case if they’re able to pay back at least some of their debts as part of a Chapter 13 bankruptcy.

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.


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