Filed Chap 7, just got a contract job paid in stock shares

[lindag]

Hello!

I filed for BK in late August. My 341 is next week.

5 days after I filed bankruptcy, I received a consulting job offer and signed a contract for a 3-month job and I will be paid in stock shares, but no cash or other benefits. I needed to take some sort of work as I am about to lose my house.

I have not yet received the shares but should any day... they were originally worth about $10,000 when I signed the deal. Stock price rose and now they are worth about $30,000!! I still owe a lot of friends and family money and need to pay $3,000 in back mortgage payments, so when all is said and done, I will still only have a little bit of money left over. This is money I will need to live on for the rest of the year as these consulting jobs come sporadically.

Since I may have the shares and may need to cash some of them out before my 341 meeting, do I need to disclose this in the meeting? The stock prices could fall before I even receive them, so the value is obviously not concrete.

Also, I was considering taking this job before I filed bankruptcy but turned it down because it seemed too risky. Since a salaried job offer i was hoping to get fell through, i decided to take this job after all.

My debts are WAY more than these stocks are worth but what if the stock value goes way up??
Will I lose these shares?

Thanks in advance for the help.

[tcreegan]

stock shares during BK

Hi lindag,

You hit a grey area of BK law. Under the old rules, the only thing that mattered was your financial condition at time of filing. Now the BK is more 'forward looking' On one of your schedules there was a question about any 'reasonably anticipated' change in income. The new rules allow a trustee or judge to look at the debtors "totality of circumstances"

In the 341, you are under oath so be honest.
Don't bring up that you owe money to family, paying family is taboo in a BK
Don't bring up that you need the money to pay off a single creditor (mortgage), the job of the trustee is to take $$ and spread it evenly amongst creditors.
DO bring up that this is likely the only $$ you will have for the next 3, 4, maybe 6 months. 10K divided by 6 months is going to be way below median income, so given the "totality of circumstances" this is going to be barely enough to live on.

And remember, I am NOT a lawyer. A local lawyer will be able to anticipate what the trustee is going to ask/not ask, focus on/not focus on in your case. And being a 'grey area' of BK law, a lawyer is your best option.

Good luck with this,

Tom in Colo

[angles]

That’s good advice Tom. At our 341 one of the filers reported receiving a new job after being questioned if she did find employment. The trustee asked questions about how much will she be making, number of hours, etc. She only had the job for about a week (no pay check yet) and it was part time so she could not provide a clear answer. The trustee finally said "ok" and congratulated her on finding employment and moved on.

Based on that experience I would be prepared to answer that question to the trustee but from what tom had posted if you expect this to be your only income over the next few months you should be fine.