Getting a Job after 341 and before discharge

[BigHairyPig]

Anybody have any thoughts about getting a job (I've been a stay at home mom for 12 years) and how it could impact a smooth discharge? (ie: your income will obviously increase, means test, etc. We are pro se ch. 7. Would UST push for a move to 13?

[HHM]

Once your case is filed, you can pretty much do anything you want with employment. Generally, if you get the job AFTER the 341 Meeting of Creditors (the trustee meeting), then it won't matter.

[justbroke]

Yep, after the 341 Meeting is pretty much smooth sailing. No worries.

[BKDefender]

If you get a job after you file but before your 341 meeting, it will only impact your case if the pay is enough that you could easily pay your debts - i.e. 'changed circumstances'. i.e. if you were out of work for a year, filed bankruptcy, then got a job that pays $500k/yr the trustee would file for dismissal for 'changed circumstances'. Otherwise it doesn't really affect your case.
Even after the 341 meeting, if you get a job that pays a large amount of money, the trustee could still file a motion to dismiss your case for changed circumstances, but it would have to be a high paying job.

--William

[spamdress]

If you get a job after you file but before your 341 meeting, it will only impact your case if the pay is enough that you could easily pay your debts - i.e. 'changed circumstances'. i.e. if you were out of work for a year, filed bankruptcy, then got a job that pays $500k/yr the trustee would file for dismissal for 'changed circumstances'. Otherwise it doesn't really affect your case.
Even after the 341 meeting, if you get a job that pays a large amount of money, the trustee could still file a motion to dismiss your case for changed circumstances, but it would have to be a high paying job.

--William

I'm sorry to hijack the post but I was going to ask this same question.

I'm a full time unemployed student whose wife is the sole source of income. She is pregnant and due in July. I just need a temporary job to cover expenses while she is out on maternity (which may start a month or two earlier than usual).

The sudden increase in income (an extra 1000-2000 a month) would make it appear that we could easily pay our debts. The problem is that I'm staying home with the baby and finishing classes online as soon as she goes back to work.

Would a trustee even believe me? Is it safer to just cross our fingers, hope for the best and wait until after the discharge? We filed Chap 7 last week by the way.

[Pizza]

I'm sorry to hijack the post but I was going to ask this same question.

I'm a full time unemployed student whose wife is the sole source of income. She is pregnant and due in July. I just need a temporary job to cover expenses while she is out on maternity (which may start a month or two earlier than usual).

The sudden increase in income (an extra 1000-2000 a month) would make it appear that we could easily pay our debts. The problem is that I'm staying home with the baby and finishing classes online as soon as she goes back to work.

Would a trustee even believe me? Is it safer to just cross our fingers, hope for the best and wait until after the discharge? We filed Chap 7 last week by the way.

The forms asked you for the "Estimate of average or projected monthly income at time case filed". Since you're not employed yet, obviously a temp job couldn't be "projected". If you need a temporary job just to file in the gaps, would it really affect your total income when counting her loss of income?

My best guess would be to take the means test again once you have a clearer picture of what your income is (when your 341 is looming). There could also be some additional expenses to consider, including scheduled doctor visits, etc. It's hard to say right off.

[BKDefender]

spamdress: The trustee's concern is that if you are unemployed when filing BK, and become unemployed after filing BK, is that you were intentionally underemployed just so you can file BK. If it's a temp job and there are short-term reasons for your employment while a student, I honestly don't think it would create any cause for concern.

--William

[Pizza]

The trustee's concern is that if you are unemployed when filing BK, and become unemployed after filing BK, is that you were intentionally underemployed just so you can file BK.

If you're unemployed when filing BK, how do you become unemployed after filing?

Either way, one would think this stance would be incredibly hard to prove, especially with so many people out of work right now. If I had filed bankruptcy last week and started my job search this morning, it could still be months and months before I could find a decent job.

[BKDefender]

Sorry - that was supposed to be 'become employed after filing BK'.

I've had potential clients (which I declined to represent) who said they just quit their job working for their dad so they could file bankruptcy in a few months, then after filing they would go back to work. If I saw that someone lost their job a month or two before filing BK and started work after filing BK but before the 341 meeting, I would be suspicious. After the 341 meeting - not so much because it's not generally reviewed after that.

--William

[Pizza]

Sorry - that was supposed to be 'become employed after filing BK'.

Ah. Gotcha.

I've had potential clients (which I declined to represent) who said they just quit their job working for their dad so they could file bankruptcy in a few months, then after filing they would go back to work. If I saw that someone lost their job a month or two before filing BK and started work after filing BK but before the 341 meeting, I would be suspicious. After the 341 meeting - not so much because it's not generally reviewed after that.

Those clients just basically came right out and said they wanted to defraud the system?

Generally, people who lose their job file if they were living on the edge beforehand, and then go looking for work again. A situation like that would be very difficult to prove fraudulent, so for the majority of us who hit a hard spot and needed relief, it's really a non-issue. I certainly can't think of a good reason for a legitimate filer to just sit around jobless after filing bankruptcy.

[spamdress]

spamdress: The trustee's concern is that if you are unemployed when filing BK, and become unemployed after filing BK, is that you were intentionally underemployed just so you can file BK. If it's a temp job and there are short-term reasons for your employment while a student, I honestly don't think it would create any cause for concern.

--William

Thank you. My biggest fear was that I'd find a summer internship or land a job through a temp agency and the court would view it as "currently working," deny the bankruptcy and then I'd be back to square one when the internship/job was over. My 341 is on 4/15. Any job that I find won't start before then. Unless the trustee asks about maternity leave at the meeting, I guess I'll keep quiet about it.

Thanks again!

[spamdress]

If you're unemployed when filing BK, how do you become unemployed after filing?

Either way, one would think this stance would be incredibly hard to prove, especially with so many people out of work right now. If I had filed bankruptcy last week and started my job search this morning, it could still be months and months before I could find a decent job.

"decent job"
I'm willing to settle for one of the fast food places down the street if necessary. I have a friend at a staffing agency who "claims" to be able to give me a job if I need it. I agree with you though...it could be months if that (realistically) doesn't come through.

[srjth]

With ch. 7, do the trustees continually review your case after it's been discharged? I guess my question is, how does the trustee know of all the goings on of your case after discharge? My attorney never explained this to me.

[BKDefender]

The Chapter 7 trustees normally don't monitor what happens after they issue a notice of no-asset case, and especially after they issue the discharge. If you have an asset case he/she will monitor your case for proofs of claim that need to be paid.
Other than what is filed in the docket, the trustee knows what you and/or your attorney tell the trustee. If, for example, your tax refund is going to be $4k instead of the $800 you put in your petition, your attorney is required by law and by his professional license to inform the trustee and file an amendment so that the trustee can decide to keep the non-exempt portion or abandon it for you to keep. If you don't tell the trustee, you get to keep it, but if your case is chosen for one of the random U.S. Trustee audits and they find that you had a larger tax return, they'll reopen the case and request the discharge be revoked and the case dismissed.
It's kind of like taking too many deductions on your tax return or speeding on the street - it only hurts when you're caught and then it hurts real bad. It is better to be honest, shine the light of day on everything, and get your discharge without having to worry about any further repercussions.


--William

[potsie834]

BKDefender,

I have a question; I filed Ch.7 back in mid January, and I had my 341 on 3/16/10. The trustee already filed his report of "No asset", and gave back all my financial information that had been included in my petition. In addition, the trustee never even asked to see updated paycheck stubs, bank statements, or 2009 tax information. The trustee never even asked if I was getting a tax refund. Now, I have the opportunity to work a lot of overtime for the next 2 weeks (I’m talking 80-100 hours). If I do work the overtime, my next paycheck in early April is going to be about $7,500-$9,000 in a two-week period. This is a rare opportunity, but for the first time in over a year, it will give my family some disposable income. Could this be a potential problem; and theoretically, could I be forced into a Chapter 13. If so, as much as I would hate to do it, I will turn down the overtime.

Respectfully,

Potsie834