help! day 33 waiting for discharge AND..

[tommy463]

Just an update. Just spoke with my atty....says since it is commission and variable...should not be an issue.

I am crossing my fingers...

Thanks everyone....long night!

[Stilltheone]

I was told by an attorney that it did not matter what you made after you filed. Is this correct or not? If you received a promotion after your 341 can they convert you to a 13? It does not seem right because if your income goes down after the 341 they do not take that under consideration so I do not know why it would be any different if it went up. Anyone have an experience where their income went up after 341 and then were forced into a 13?

I was wondering the same thing!

What happens if you receive a promotion after your 341?

I thought that once your 341 meet was done, you were done.

[lrprn]

Just an update. Just spoke with my atty....says since it is commission and variable...should not be an issue.

I am crossing my fingers...

Thanks everyone....long night!

Glad you finally got your answer, tommy! Hang tight - all will turn out well in the end. Sounds like your lawyer is right on top of things - it's safe to go take a nap now!

[rrockinggramma]

you had to provide copies of our taxes, right? How different were the incomes you filed taxes on and what you stated on your schedules. Talk to your lawyer and try to build a case that your income averaged out is what you stated on your schedules. GL

[tommy463]

This is crazy...my atty called and said the UST may be trying to move me to a chapter 13 based on income AFTER the 341....

What can I do?

[lrprn]

This is crazy...my atty called and said the UST may be trying to move me to a chapter 13 based on income AFTER the 341....

What can I do?

This is an evolving area of Ch 7 case law interpretations currently.

Here's what the US Courts' Ch 7 webpage has to say - http://www.uscourts.gov/bankruptcyco.../chapter7.html
"Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts." (The bold addition is mine.)

Did you know this big commission was coming before you filed?

Keep in mind that just because the US trustee *wants* to do something doesn't mean he/she will succeed. However, this might be a longer Ch 7 ride than normal. Work with your lawyer to prove that since you are working on commission, your income must be AVERAGED and that basing anything on a small snapshot of time since filing won't hold true over time.

Hang in there - we're here for you!

[tommy463]

well, I made around $40k from June to year end of 2007....and the meadian was 82k for my area and family size.

I had to include my Jan / half of Feb which just put me over the means...but I still passed the means test signifacantly.

Now, adding in March and April...I think I may be over the means...but I filed 2/15...and will not maintain this level of income...ahhhh.....

[FreshLikeADaisy]

To Tommy, James, Stilltheone, etc --

In general, a Ch7 bk is a snapshot of your finances as of the day you file. However, that is not the way the law is written; the law itself is much more broadly worded. In other words, there are no hard and fast rules.

The thing that comes into play is the "totality of the circumstances" as determined by your trustee on behalf of the court. Lrprn posted one part of the actual law that gets specific as far as declaring an expected change of income after filing, but to be honest the entire new law gives very broad investigative rights to the trustee.

The "six months prior to filing" lookback is a myth: while that is commonly true, it is by no means universally true. Just for starters, my trustee went back a full year on bank statements and other financial account records, and three years on taxes, and had me sign a very broad release so that he could access my financial information independently of whatever I provided. And that was before he cracked open my folder and looked at my filing.

I don't want to scare or concern anyone; someone like Tommy who is on commission has a VERY good defense, as Lrprn pointed out. I really don't think Tommy has a lot to worry about just yet, although it's always upsetting to hear from the UST!

But when it comes to how far or deep a trustee can or will look, on income or assets or anything else, *don't* count on the minimums. Give him whatever he wants, study the issue for yourself, and be prepared to submit an alternate explanation for whatever he finds problematic. In the end, there has to be cause for your bk to be dismissed or even converted to a 13, so chill out and think out your response.

And in the end, a 13 is by no means the end of the world: you are allowed to convert to a 7 at any point you meet the requirements for a 7, and you still have the protection of the automatic stay (no lawsuits, judgements, creditor calls, etc.) so the trick then is to work out a plan with your atty that you can live with *for the moment*, and then convert back to a 7 when circumstances are more optimal. It's really not as bad as it seems.

Good luck!!!

[FreshLikeADaisy]

well, I made around $40k from June to year end of 2007....and the meadian was 82k for my area and family size.

I had to include my Jan / half of Feb which just put me over the means...but I still passed the means test signifacantly.

Now, adding in March and April...I think I may be over the means...but I filed 2/15...and will not maintain this level of income...ahhhh.....

Tommy, if I were in your shoes, I'd be preparing to submit documentation that would show my month to month income for the entire year of 2007, and your expected income for the next couple of months based on seasonal changes you experienced in prior years. In fact, if you have to go back two years, do it. If this puts you below the median, no worries. If you have to average these things, and averaging the year (instead of the six months, or eight months) is in your favor, don't hesitate to do so. That's my thought, at least.

[tommy463]

They are trying to say that I knew I would be earning extra commission after I filed BK and that it should be a presumtion of filing in bad faith....nice, like you know on a sales job what your commission is going to be...it is not long term sales or anything like that...

I guess I am in for a rocky one...

[FreshLikeADaisy]

Tommy, if you can provide documentation of prior months' income that would tend to disprove that, you're winning. In other words, if your income was down last February, how could you expect to see an increase in this February's income?

I just want to reassure you that this is NOT the end of the world. Many people have gotten such a challenge from the trustee only to have it quickly dispensed with when they provided additional documentation. Your bk is NOT over. But do quit stressing, and start thinking clearly about what facts in your income history you can use to disprove that you had any inkling you'd be making more now.

And also be thinking about how to demonstrate that this temporary increase in income does not change the totality of your circumstances, because that is a major issue. In other words, if you made an extra $2k this month, but your expenses are still way more than your income, that's meaningful because it takes the relevance out of declaring that extra $2k. So start thinking about the totality of your circumstances and how this extra income does or does not affect your ability to pay your outstanding debt, and how you and your atty can present that to the trustee.

You are NOT the first commission-based filer your district has ever seen, so take comfort in that, and in knowing it's not just up to one guy and his opinion. You have multiple opportunities here; I hope you avail yourself of them and successfully turn this situation around. Good luck!!!

[MajorMike]

I'm in a sales based job too but in a 13 because I can make peanuts one month and a crapload the next. The trustee said...no way...too variable. You can afford a 13...and I dont mind because I want to pay my debt back. I hope things work out for ya pal.

[tommy463]

I see. I have only been at my job for 8 months now...and completly new to the field after my trainwreck year of 2007...so I don't know how to show things.

I am just in waiting mode to hear back from the UST after reviewing all the info I sent.

[Stilltheone]

Tommy,

I wanted to say that you are definitely not the only one in a commission based salary here.

In fact, that's the reason we filed....my dh's commission program was changed, shorting us $25K/year for his salary...His commission program had been the same for the last 7 years, then poof...the company decided to change the program.

Luckily, we qualified for the Ch7 b.c his bonuses were cut that much.

Good luck!

[PaKettle]

Good luck Tommy. I hope your attorney will fight for you.
I'd have a talk with him, plead with him to fight the Trustee for you, assure him you did not know the commission was coming, and that your income is not in any way SURE to continue as it has.
What about the economy and how it's slowing up? Surely that should be a factor in your future income as a sales person?
What about your last job? Did that income go up for awhile and then go back down?

Worse case scenario I guess you could willfully make less money if they throw you into a 13 and then convert back to a 7, no?

Good luck! Hang in there and work on thinking of things to convince the Trustee that you NEED a Ch. 7, not a 13. What about other salesmen where you work or the boss? Could they provide you with stats that your income may go up temporarily now but then most likely go back down? Just brainstorming...