Income change after filed chapter 7

[mindy0795]

What happens if your income changes after you file Bankruptcy? Here is the situation. Husband took pay cut of $400.00 a month that was effective on February 2nd, told attorney this but he said he already had the paperwork drawn up at his previous income level and would just make a note on the bankruptcy papers that we are anticipating a $400 reduction in pay. Without the reduction in pay our schedule J shows +40.00 disposable income. Now......my husband got notification that he will be moving to a different position within the company (doesn't know when yet but will probably be in the next 2 weeks) Income will now increase to a little of $100 more than what the attorney originally stated in the bankruptcy paperwork. So we no longer will have a $400 a month decrease but a $100 increase. We filed on 02/12/09 now what do we do? Our 341 hearing is March 26.

[BKParalegal]

As long as the income doesn't change before March 26, then you can answer honestly when the Trustee asks if your income has changed. If it changes before the 341, you can have your attorney amend I and J to reflect the change. As long as your disposable is less than $187 a month, you are fine.

PS Try to keep your questions about your BK in one thread, that way I don't have to tell you your attorney is an idiot in multiple threads.

Good Luck

[linnzy]

Just curious...and I apologize if I should have read this somewhere else. But, Where did the $187 figure come from?

Also, if you pass the means test how much do they look at your monthly expenses? I mean if you take away the house payments and credit card bills, obviously we'll have some money left over, right?

We are filing in a couple weeks and I am getting more scared every day, actually every minute.

[Tbornetun]

Will you still pass the means test with the new income? If so, you have NOTHING to worry about. The income decrease was, to the best of your knowledge, the truth at the time of filing.

EDIT: The only income amount that matters is the 6 month prior to filing to pass the means. Even if the paystubs show a little more income, it won't matter. We are talking about a couple hundred buck, not 1000s.

[TEW]

As long as the income doesn't change before March 26, then you can answer honestly when the Trustee asks if your income has changed. If it changes before the 341, you can have your attorney amend I and J to reflect the change. As long as your disposable is less than $187 a month, you are fine.

PS Try to keep your questions about your BK in one thread, that way I don't have to tell you your attorney is an idiot in multiple threads.

Good Luck

Even if you do have to tell the trustee you are already filed and that's what counts.

[AngelinaCatHub]

At this point, I would keep quiet, advise your lawyer, (as much a F-U as he seems to be, so what else is new? Go with what he says. Then you shift any responsibility to him. HE IS YOUR EMPLOYEE. They fail to remember this. 'Hub

[laurannm]

Let your attorney know but I wouldn't tell the trustee unless you are specifically asked. Some trustees will ask you at the 341 if there have been any material changes in income, others will not (ours did not ask).

[mindy0795]

Thanks for all the comments. I was told by the attorney that if disposable income was over $100.00 they would throw us into a chapter 13 even though we are under the median income. Found out this morning that husband's pay raise will be on next weeks check so I will have to let our attorney know about the change. Hopefully the trustee won't question us to much on it but my luck he probably will. I calculated it out with the new raise and we will now have disposable income of 146.00 a month, just wonderful.......

[Tbornetun]

I still don't think they can just throw you into a Ch. 13 because of disposable income on I and J. If you are still under the means test, you are most likely going to be fine. I have filed many cases where the I/J leftover income is around $500 but the client still fell below median on the means test. NONE of those cases were ever converted to a 13.

[laurannm]

I still don't think they can just throw you into a Ch. 13 because of disposable income on I and J. If you are still under the means test, you are most likely going to be fine. I have filed many cases where the I/J leftover income is around $500 but the client still fell below median on the means test. NONE of those cases were ever converted to a 13.

They most definitely can, if the UST decided to pursue a "totality of circumstances" case against the debtor. I don't think it happens often, but is is possible

[Tbornetun]

What I said was they can't just throw you into it. There is a lot of work that would need to be done on the Trustee's end and after relooking at the schedules, the debtor can amend their I/J if it comes to that. I'm sure there are expenses that could have been overlooked the first time around. If a debtor passes the means test in the first section without needing to go to the expenses section, the UST doesn't usually look into the case. They are pulling cases that pass only by using the expense section of the means to verify and/or investigate. I wouldn't worry about it, especially over $186.

[mindy0795]

I was told that in Pennsylvania which is where we live that the trustee's don't care if you are under the median income it goes by disposable income on schedule J. At least that is what our attorney says. He is an experienced attorney. Since the new bankruptcy passed there are only 2 attornies in my area that will even do bankruptcy's. I hope you are right though I am ready to pull my hair out! Any idea how I can find out for sure? This is going to make my blood pressure go insane being that the 341 meeting isn't until the end of March......

[Tbornetun]

I guess it could/would depend upon your district. I just don't see $186 being that big of an issue to warrant the UST getting involved. Is your food listed at the IRS standard? Clothing? Transportation? These are areas which could very quickly eat up the $186. It would be very simple for your attorney to amend schedule J if it becomes necessary. You also need to keep in mind, the schedules reflect your current income and expenses as of the date of filing. Nothing is wrong with your schedules as they have been filed. You had no way of knowing that anything would change the way it did.

I don't know where you could find out a definate answer on this. Sorry.

[mindy0795]

Our expenses are below the irs limits but...... attorney said he felt food was high at what we have it listed at 740.00 a month and that includes cleaning supplies/paper products/personal stuff for a family of 4. He also said our auto expense is high which we have listed at $350.00 a month. He would only allow $30.00 for entertainment/recreation expense. Everything we listed are our actual expenses that I can provide proof to the trustee if needed. The only other expenses that we could probably adjust would be the medical expense. I have that at $100.00 a month due to the fact all 4 of us are required to wear eye glasses. so that doesn't even include dental or medical expenses. We may be able to adjust that one if we have to. What a nightmare.......

[okiemom2008]

I wondered about this same thing. My husband just found out he has the opportunity to get a new job in a new location where we want to live that pays alot more than the one he has now.

We are under the means. We are filing very soon. Our lawyer says he can quit his current job during the bk but cannot get the new job that pays better. How long do we have to wait to get another job?(He is not quitting his current job until then). It is such a good opportunity I really don't want to have to pass it up