What would you do?

[doomed]

I entered into what I'm hoping the court will see as a "personal services contract" and it will be excluded from the bankruptcy estate.

I just checked the contract, and I'm scheduled to receive $3,750 from it on the 1st of the month (September) and they owe me $900 in reimbursements. I've never been so pissed about receiving a lot of money before in my life.

Should I just assume all of this money will be taken by the court?

We haven't filed yet, for what its worth. Still working on the details.

And PS, if this money from this contract would pay off the nearly $150k in debt we owe, I'd do it gladly.

[doomed]

bumping.. anyone?

[drowning123]

I may be wrong here, but I'm reading and learning a lot. Maybe someone could answer better. Would it be considered income? If so, would it push you over the median for your state? Probably. I think the court would only be interested in the difference between your median and the money you receive. Can't you spend it down to pre-pay some of your utilities and purchase groceries so that it's at the exempt amount or lower for your state?

[doomed]

I haven't been paid anything from the contract yet so I don't know that they'd consider it income, and it is only for a period of time. The first month is not representative of the following months -- they will be around 2k/month.

[drowning123]

Where's Tom from Colorado when we need him?

[tcreegan]

doing fine

Hi doomed, Hi drowning,

You are doing fine drowning, we need to know where doomed stands w/ median income for their state. 3750 / 6 months = 625 increase in income on the means test. How does that compute? If it puts you over median, did you hunt down and max every expense?

Also need to know what state you are filing in. If you can use federal exemptions or if your state has a wildcard exemption you can protect it that way.

As to a personal services contract, if you perform services and get $$ for doing so, it is income. Now if you spend money, then get reimbursed for it, that is not income.

Let us know what state and where you stand on the means test median income and we can help out.

Hang in there,

Tom in Colo

[doomed]

Tom, I will get to use federal exemptions because the state I resided in before this one had it (I've only been here a year) . .

We are under the median income for the state by about $12k I think. Would they really count this if I haven't received it yet? I thought they only counted your previous 6 months, where we didn't make much? I'm really regretting going into this contract because I'm worried its going to screw up our bankruptcy. It originally wasn't supposed to take place until later in the year but the pressure was put on and I agreed to it, stupidly. And there is NO way I can back out.

[drowning123]

Maybe it would be ok if you receive it after your 341 goes smoothly.

[tcreegan]

state of residence

Hi again doomed,

the state I resided in before this one had it (I've only been here a year) . .

If you have been in a state for a year, you will have to file in that state. In fact if you have been in the new place for 180 days, that is where you file.

Hope this doesn't mess things up too much for you....

Tom in Colo

[doomed]

Tom, Nolo's book said I wouldn't be able to file in this state since I hadn't been here TWO years. It said I would file wherever I had lived the longest the previous 180 days to here.

[tcreegan]

residency

Hi doomed,

wherever I had lived the longest the previous 180 days to here

It is the 180 days b4 the filing date. If you were in the new state 180 days before filing, you have to use the new state.

Don't want you to find out the hard way,

Tom in Colo

[momofthree]

According to legal consumer http://www.legalconsumer.com/bankruptcy/laws/#Help I think someone (ladyinthered?) also recently posted the actual law related to it, but I don't know how to search that.

Prior to the new bankruptcy law, filers used the exemptions of the state where they lived when they filed for bankruptcy. Under the new rules, however, some filers will have to use the exemptions of the state where they used to live. Congress was concerned about people gaming the system by moving to states with liberal exemptions just to file for bankruptcy. As a result, it passed residency requirements filers have to meet before they can use a state’s exemption system.
Here are the new rules that apply to exemptions for everything but a home:

* If you have lived or made your residence in your current state for at least two years, you can use that state’s exemptions.
* If you have lived or made your residence in your current state for more than 91 days but less than two years, you must use the exemptions of the state where you lived for the better part of the 180-day period immediately prior to the two-year period preceding your filing.
* If you have lived or made your residence in your current state for fewer than 91 days, you’ll need to wait until you have lived there for at least 91 days before you can file (and then use whatever exemptions are available to you according to the rules set out above).
* If the state you are filing in offers a choice between the state and federal bankruptcy exemptions, you can use the federal exemption list regardless of how long you’ve been living in the state.
* If these rules deprive you of the right to use any state’s exemptions, you can use the federal exemption list. For example, some states allow their exemptions to be used only by current state residents, which might leave former residents who haven’t lived in their new home state for at least two years without any available state exemptions.

A longer residency requirement applies to homestead exemptions: If you acquired a home in your current state within the 40 months before you file for bankruptcy (and you didn’t purchase it with the proceeds from selling another home in that state), your homestead exemption will be subject to a cap of $125,000, even if the state homestead exemption available to you is larger.

[justfiveofus]

We dealt with the residency issue. If you've lived in your state for the greater part of the last 180 days you FILE in that state. However, your EXEMPTIONS may be from your previous state.

[tcreegan]

residency correction

ouch, I made a big mistake in reading the law....it is NOT 180 days prior to filing, it is 180 days prior to the last 730 days of residency !! Not sure how I could misread that.....

ERROR, ERROR, Danger Will Robinson, Danger......

Thanks to those who corrected me !!

Tom in Colo