Chapter 13 Trustee Monitoring: What NYC Filers Need to Know

Will trustee monitor income in bankruptcy

If you’re considering Chapter 13 bankruptcy in New York City, you might be wondering: will the trustee monitor your income throughout the entire plan?

The answer is yes—but with important limits. While Chapter 13 trustee monitoring exists, it’s far less invasive than most people fear.

Let’s walk through what the trustee reviews, when they might act on changes, and how my office helps you stay protected throughout the five-year plan.

What the Trustee Looks At When You File

In NYC, once you file Chapter 13, the trustee wants to see proof of your income. This typically includes:

Recent paystubs
Bank statements(not all trustee’s request these)
Tax returns
Income from your spouse or household members (if part of your financial household)

This review happens early, usually before your plan is confirmed by the judge. The trustee is trying to understand your total household income and whether your proposed repayment plan is feasible.

After Confirmation: Monitoring Drops Off

Once the plan is confirmed by the bankruptcy court, you’ll begin making monthly payments for three to five years. And here’s the good news:

In about 99% of cases, your payments do not increase.

Even if your income changes, there’s usually no automatic adjustment to your payment. You continue to pay the same amount unless someone actively files a motion to change the plan.

But the Trustee Still Gets Your Tax Returns

Each year, you’re required to send your tax return to the trustee. This allows them to track whether your income has significantly increased.

Most of the time, they don’t do anything with that return, they just want to see if you received a tax refund. Some of those refunds go to the trustee in addition to regular payments.

But once in a while, if your return shows a substantial jump in income—or receipt of a large asset like a settlement or trust distribution—the trustee can:

Request documentation
File a motion to modify the plan
Ask the court to increase your monthly payments

This doesn’t happen often, but it’s legally allowed under 11 U.S.C. § 1329(a).

Can They Really Make You Pay More?

Yes—but only if they go through proper legal channels.

Under § 1329, a trustee may request a post-confirmation plan modification. But they must prove that:

Your income increased meaningfully
The new payment still meets the plan’s legal requirements under § 1325(a) (the “best interests of creditors” test)

Courts generally won’t approve a modification unless it’s clear you can afford it and that unsecured creditors are receiving at least what they would in a Chapter 7 case.

Key Cases Supporting This:

In re Colon (2013): The trustee requested settlement funds be added to the plan. The court denied the request because the motion wasn’t properly filed under § 1329.
In re Wright (2022): The trustee’s motion to increase plan payments due to new trust distributions was granted, even though the debtor had nearly completed their payments.
In re Davenport (2011): A trustee successfully recovered post-confirmation windfall funds that had been spent without court approval.

How We Defend Against Payment Increases

If the trustee does question your increased income, we don’t panic. Here’s how we usually respond:

We show increased expenses: Rent hikes, child care, medical bills—if your costs have gone up alongside your income, we present that to the court.
We update your budget: A side gig or bonus might not change the big picture.
We negotiate: If an increase is unavoidable, we work to minimize the impact.

In most cases, we can show that your net income hasn’t changed significantly—and stop the trustee from raising your payments.

Key Takeaways

Chapter 13 trustee monitoring in NYC includes initial income review and annual tax returns.
After plan confirmation, changes to your payment are rare.
Trustees can file a motion to increase your payments if your income jumps—but they must follow the law.
My office helps you respond with updated financials, and most of the time, we avoid any increase.
Chapter 13 remains one of the most flexible and protective tools for people with regular income and growing debt.

If you’re considering bankruptcy or simply want to understand your options, we’re here for you. Call or text us at 212-244-2882, email us at info@midtownbankruptcy.com, or visit www.midtownbankruptcy.com to get started. At The Law Office of William Waldner, P.C., we’ve helped countless New Yorkers take control of their financial future — and we’re ready to help you, too.