If I Move into a Rent-Free Home, Must I Inform the Chapter 13 Bankruptcy Trustee?

If the debtor in the Chapter 13 case moves out of a location where he or she is paying rent and then moves to another location where no rent is required, at least two issues arise:

1. While the debtor is certainly free to move his or her residence during the course of the bankruptcy plan, the debtor is obligated to inform the bankruptcy court of his or her current address.

2. If the debtor is no longer paying rent to a landlord, the corresponding cost savings could produce “disposable income” that may cause the Chapter 13 plan payments to change. This is not a hard and fast rule, but in some circumstances the trustee would require a plan amendment upon an increase in monthly disposable income during the first 36 months of a plan.

These situations can be highly fact-specific and must be considered in light of current bankruptcy law. Any filer should seek qualified legal advice regarding your obligations as it relates to plan amendment if your disposable income increases.