Income after filing

[PVS]

What happens if your income increases between filing and discharge? I've been working my tail off trying to make commission income these past few months, with little to show for it. So, I plan to hire an atty this week to discuss filing a 7.
What happens if my income shoots up after I file? In case you are wondering, I have no idea if or when this may happen, so I'm not hiding anything. Right now it's feast or famine, and short on the feast.

[Tbornetun]

nothing happens, you can make as much as you want after filing.

[PVS]

Wow. I'm sure that was a stupid question, but that is great news.

[lrprn]

The one issue you might face is if your income increases significantly between filing and your 341 meeting, some trustees ask at the 341 meeting if your income has changed since filing (ours did). Some trustees also ask to see copies of your paycheck stubs between filing and the 341 as well (ours did this too). Yours might not - the questions asked during 341s do vary between trustees - but why take the chance? You want to be able to answer truthfully that your income hasn't changed since filing - you're under oath, so lying about it is....well....shall we say, a really bad idea :/

To be completely 100% safe, avoid getting a significant increase in your income that shows on your paycheck until after your 341. Then you're home free.

[dakota112]

So the only way out of this predicament if I am hearing right is to not be paid a cent more than the allowed monthly average you earned prior to filing for the 6 month lookback under the means test for the time leading up to the 341 and then one can go out and if they want to work 20 hours a day if they so wish to? Is there a law that would then prevent you from working harder after the 341 meeting? I would suggest folks try to have family help them through this period of time and tell the trustee there has been no increase of income, show him your paystubs if you can control your income and then IF you want to work harder after the 341 , that should be your choice in the USA. I would suggest if they are going to sniff around even longer than that, ie a year, it is still better to live at the median income level than 5 years in a CH 13! This is really a crazy sort of game and being knowledgeable and informed is the only way to extricate oneself from it.

[PVS]

Really? I don't feel as happy now. I am sure that my income will change considerably for the better in the next few months. It can't get any worse. Will see what the atty says this week.

[Tbornetun]

It will not be an issue. The OP is intending to file Ch 7, not 13, if they qualified for the 7 when they filed, that's it. It would matter in a 13 because your potential dmi goes up. Chapter 7 is based on the facts the day of filing. It is what it is.

[PVS]

Please explain OP & DMI. Search showed no results. Thanks

[Tbornetun]

OP=Original poster
DMI=Disposable Monthly Income

[debbie42]

We are in a similar situation - a year of slashed salary and an eventual layoff are what boosted us into BK - as our lawyer said, when you have a professional career/job, they don't expect you not to make more money forever, it does seem 'safer' to wait until after the 341 meeting to make more, however everyone I have ever talked to and everything I have ever read said that Ch.7 is the 6 months prior to and including the file date-that's it. But as someone else said, you don't want to feel the need to lie if they ask if your income has increased either...definitely speak to your attorney about it and good luck with everything!

[PVS]

Good luck to you as well Debbie. Thanks.

[dakota112]

Thornetum; Isn't there some case law precedence Cortez in Texas where the Trustees file a motion of abuse and prevail if the debtor's postfiling income in the coming year goes up than off to CH 13 and goodby to 7 even if you are neg on MT and DMI in 6 month lookback? Seems they can change these laws Congress passed to suit them as they please by jurisdiction. All a game.

[Tbornetun]

I am not sure but the OP is receiving a bonus, not an ongoing increase of income.

Bottom line is that your income is what it is, if it should increase you are not going to say no to more money. Let the chips fall where the may.

[freakedout]

I am in a similar situation. I lost my job in Feb 2009 and am still looking. Receiving unemployment. We went from household income of $200,000 to household income of $70,000 including my unemployment. What happens if after we file, I find a job making what I made before? We are planning on chapter 7 - hopefully.

[killinstinct]

The bankruptcy estate only includes your wages for the six months preceeding the filing date. This is clear. Any wages you make after your filing date are yours and have nothing to do with the case. It is perfectly legal (and in fact, expected) that you would file when you have hit rock bottom in this area and have no where to go but up.

So, 99.9% people have NOTHING to be concerned about if they make more after they file.

The only possibility would be in the most egregious circumstance the UST could file a presumption of abuse for totaility of circumstances, claiming that you filed knowing full well you were about to recieve a HUGE increase in income, and you should have anticipated you could pay back SOME of your debt.

But you should probably just try not to worry about it. It's okay to be optimistic and try to make a better living.