Ok, confused . .

[doomed]

I talked to my lawyer today and he wants to file for bankruptcy tomorrow, as it would be before the 1st. On the 1st is when I'm scheduled to receive nearly $4k from a personal services contract.

I ran the numbers and either way, with this $4k or not, we'd still be under the median. Is there any advantage then to filing before the 1st? I mean obviously it doesn't matter either way as we pass the income test, but would waiting til after the 1st and this contract goes into effect more likely push us into a Chapter 13 versus filling tomorrow, before the 1st contractual payment? Anyone?

For the record, its unlikely I'll RECEIVE the money on the 1st, but in the contract that's when I'm SUPPOSED to.

[drowning123]

I talked to my lawyer today and he wants to file for bankruptcy tomorrow, as it would be before the 1st. On the 1st is when I'm scheduled to receive nearly $4k from a personal services contract.

I ran the numbers and either way, with this $4k or not, we'd still be under the median. Is there any advantage then to filing before the 1st? I mean obviously it doesn't matter either way as we pass the income test, but would waiting til after the 1st and this contract goes into effect more likely push us into a Chapter 13 versus filling tomorrow, before the 1st contractual payment? Anyone?

For the record, its unlikely I'll RECEIVE the money on the 1st, but in the contract that's when I'm SUPPOSED to.

Depending on the exemptions for your state, any cash on hand on the day of filing will be taken away by the trustee, that's why your lawyer is pushing to file before you receive that money. Let's say the exemption is $1,000 in your state. The trustee will take $3,000 of your money, so you should file before you receive the money.

[doomed]

Ahhh duh! That would be a good reason! Though as I said, its unlikely I'd have it by the 1st as today is the 30th and I haven't heard a thing from the escrow company and it takes them a week or so to get authorization and mail out the payment. I was just wondering if my contract saying I receive payment on the 1st (even if i didnt) would make a difference, or the fact that this contract is now in force versus before the 1st, its not.

[skweakalee]

Do you have a legally enforceable right to the money (i.e. have you already performed the work, is the payment mandatory under the contract, etc.)?

- If you do, that amount is considered part of the bankruptcy estate even though you have not received it yet. Classification then becomes the question. As Drowning indicated, classification of bankruptcy estate assets is important for determining which exemption (if any) apply.

- If you don't, your attorney just wants to keep your bankruptcy estate smaller so he/she can use the exemptions elsewhere (i.e. your attorney doesn't want to waste your wildcard exemption on the 4k [if your jurisdiction has a wildcard]).

[drowning123]

Ahhh duh! That would be a good reason! Though as I said, its unlikely I'd have it by the 1st as today is the 30th and I haven't heard a thing from the escrow company and it takes them a week or so to get authorization and mail out the payment. I was just wondering if my contract saying I receive payment on the 1st (even if i didnt) would make a difference, or the fact that this contract is now in force versus before the 1st, its not.

Aha! Lightbulb! Future earnings - fair game. No difference.

[doomed]

Do you have a legally enforceable right to the money (i.e. have you already performed the work, is the payment mandatory under the contract, etc.)?

- If you do, that amount is considered part of the bankruptcy estate even though you have not received it yet. Classification then becomes the question. As Drowning indicated, classification of bankruptcy estate assets is important for determining which exemption (if any) apply.

- If you don't, your attorney just wants to keep your bankruptcy estate smaller so he/she can use the exemptions elsewhere (i.e. your attorney doesn't want to waste your wildcard exemption on the 4k [if your jurisdiction has a wildcard]).

It's a personal services contract and not considered part of the bankruptcy estate.

Thanks everyone!