The court will not permit a debtor to continue with a chapter 13 bankruptcy case unless the debtor provides sufficient proof of income to the trustee that he is able to make the required monthly payments. If two married individuals are residing together, both spouses must include their income and expenses on the petition, no matter if one or both of the spouses have filed for bankruptcy. Typically, any additional household members must also include their income and expenses on the petition.
If a debtor does not have sufficient household income to make the monthly payment to the trustee, the trustee will permit a non-household member (ie. relative, friend) to contribute to the debtor’s monthly income. The proof that is required depends on the trustee. In general, the trustees require that the contributor sign a letter or formal legal certification reflecting their intent to contribute a certain sum to the debtor for a certain time period. Additionally, depending on the trustee, the contributor must provide a pay stub or other proof of income reflecting their ability to pay.
On occasion, the contributor will refuse to provide the above documents, as they are worried that they will be legally liable to the trustee for the monthly payment. However, in fact, the contributor will not be held liable to the trustee, court, or any other entity, for any funds, whatsoever. The trustee and court understand that the contributor only states that they intend to make the payment.
Robert Manchel is an experienced NJ bankruptcy lawyer who will provide expert bankruptcy advice. Give him a call at (866) 503-5655.