Company Bonus

[sal425]

Has anyone had the trustee keep their case open to see if a bonus was paid?

I plan on filing this week and I have in the past received a bonus in March. This was based on company and individual performance. There is no guarantee of getting this bonus and I was told last years was paid simply because the board approved it prior to the economic downturn.

Thanks-

[JoeBankrupt33]

If you haven't recieved it, then it is not part of the bankruptcy estate, and the trustee can't take it. Also, the trustee won't see your last bonus because it is not in the 6 month look back period.

[justbroke]

Exactly what Joe wrote above. The bonus is not like income tax withholdings that are collecting throughout the year.

[sal425]

Thanks for the replies, my lawyer had said it was a possibility. We'll have to wait and see-

[sal425]

Still waiting to file until my lawyer decides what to do. I found:


Year-end bonuses may be prorated over the covered 12 months, instead of being counted 100% as income when received, according to a recent case interpreting Means Test Income.

I recently posted on this In re Bernard case from Judge Joel B. Rosenthal of the U.S. Bankruptcy Court for the District of Massachusetts, which ruled that a paycheck, received after the six month lookback for Means Test income purposes, should actually be included because it was derived from that six month period. The Court held that the actual date of receipt was not relevant, despite the wording of the Bankruptcy Code.
The same logic would prorate a year end bonus for each month it covered, so that only part of the bonus would be included in the Means Test’s six month period because only part of the bonus would have been derived from the six months.
Many lawyers have been recommending thata filing be delayed until the impact of a bonus is diluted over the next few months. This advice is now open to review, although there is no guarantee that the ruling will be followed elsewhere or that the interpretation on a late-received paycheck would be consistently applied to a year end bonus.


Has anybody else dealt with this?

[readytofile]

My lawyer said that my future bonuses are just that, in the future and not part of my current salary. He said not to worry about it. We haven't gotten to the 341 yet though so who knows.

[justbroke]

I recently posted on this In re Bernard case from Judge Joel B. Rosenthal of the U.S. Bankruptcy Court for the District of Massachusetts, which ruled that a paycheck, received after the six month lookback for Means Test income purposes, should actually be included because it was derived from that six month period. The Court held that the actual date of receipt was not relevant, despite the wording of the Bankruptcy Code.

First, this is from the Bankruptcy Law Network, so you should give a credit to the Source (original article is here).

Second, look to the particulars of that case. Please read the order if you like to research/read. (You need a PACER account, but this is a free document view as this is an opinion).

The bonus was received before filing outside the six month window for the CMI. To me, this means that the bankruptcy was timed in order to avoid the income from the bonus. Income received before actually filing, can come into play, just as income received after filing and before discharge. The Trustee can file a Motion to Dismiss for "totality of circumstances" if the debtor's circumstances have changed since filing.

I don't see anything bothersome about this case or the ruling. These were actually high income earners and way over the median ($140K+ in earnings a year). The funny part was this... the Debtors claimed that they needed the $900 or so a month in disposable income to entertain and be part of a social circle. That's abuse right there.

Most of this case really had to do with the overwithholding of taxes and not the bonus.

[sal425]

Thank you JustBroke-

I will update as my case progresess.

[justbroke]

I will update as my case progresess.

We look forward to your successful and un-stressful case!

[sal425]

My lawyer talked to a trustee she knows on a somewhat personal basis. He said if the bonus is not guaranteed, they will only look back 6 months. I will be filing today or tomorrow. Yahoo

[justbroke]

My lawyer talked to a trustee she knows on a somewhat personal basis. He said if the bonus is not guaranteed, they will only look back 6 months. I will be filing today or tomorrow. Yahoo

This is in line with what I believe and what my company tells us. Our bonuses are not guaranteed and can be pulled at the last second... literally.