Pay raise after filing but before creditor meeting

[lorelei]

So... my situation.

My attorney is having me come in to sign my paperwork Friday and it will be filed that day. Finally! I qualified for a chapter 7 because I lost my job in June and took a new job in December that pays about $10,000 less than the cutoff for chapter 7 in my area.

Today, my boss told me that she is quitting in three weeks and that if I'm interested in her job to let it be known. There's no guarantee that I'd get it at this point and even if I did, I don't know if the pay increase would take me above the median annual wage - and even if it did, it would take a while before the new wage and current wage would average out to make the 6 month look-back put me above the cutoff.

So, the question is - if I file for Chapter 7 while I am currently earning less than the median wage, but then get a promotion and will earn more than the median wage by the time the creditor meeting rolls around, will that harm me?

[jst4f]

As I understand the rules you need to report it IF you know that you will be getting a raise. Know as it is a certain thnig. Otherwise what happens after you file has no affect on your BK7. Since there is some variability among the BK districts, I recommend that you talk to your attorney.

[JessMN]

Good question. I think the main thing is just be honest - if you get the job let the trustee/your attorney know. This might help: http://www.bkforum.com/showthread.ph...e-after-filing

[Jawbox]

I wouldn't worry about it until you sign a contract for the new job. Until then, it could all fall apart and your numbers are accurate.

[justbroke]

I'm sorry, but it's not a new job until it's actually a new job. The only question the Trustee is likely to ask is if anything changed with your job. Unless and until your title and pay has changed, then nothing has happened. This is not being dishonest. Even courts don't like to speculate on the future. There are too many things that could happen to derail a new job or a "potential" raise.

Just go over with your attorney. I'm sure s/he will say the same.

[lorelei]

So here's what I'm thinking.

1. Bring it up to the attorney Friday.
2. Go ahead and try to get the new job. I might not get it ;)
3. If I do, and they ask me what salary I'm expecting, I'll either low-ball it to come under the median or if they give a figure up front, be honest and say I want less to start. And even then, the salary they have in mind might be under that magical figure, anyhow.

But this is all cart in front of the horse, of course! Anyway, sure feels great to be encouraged to go for a promotion after being on the job less than 4 months. Employers who value you - who knew they existed!

[justbroke]

Everything is okay... except...

3. If I do, and they ask me what salary I'm expecting, I'll either low-ball it to come under the median or if they give a figure up front, be honest and say I want less to start. And even then, the salary they have in mind might be under that magical figure, anyhow.

A new salary has absolutely NOTHING to do with what you had when you filed your Chapter 7. It's a snapshot. What a "new" salary could do, is put you into the "totality of circumstances" area where your circumstances "changed" and you may be better off than you were prior to filing.

Even after I just wrote that, it doesn't mean the end of the world. Never "low-ball" or tell a mistruth. If you have not actually started your position and are receiving the new pay amount, then nothing has changed (period). There's no need to elaborate or exaggerate. It's a yes/no question.

But this is all cart in front of the horse, of course!

Exactly. This is precisely why unless and until you actually have started the new position with the new salary, it doesn't exist.

[lorelei]

To clarify, when I said "lowball" I meant in my request for a new salary to my employer. I would never be dishonest in the court - that scares me waaay too much. But my thinking was, If I ask the employer for a salary of $40,000 when the median cut-off is $43,667, I don't think they could hold it against me that I didn't request a salary of $45,000, could they?

Anyway, I'm obsessing and this is more an exercise in hypotheticals than anything. First have to get the durned job. And that is by no means a sure thing.

[Jawbox]

Actually, asking for too low a salary can hurt you in the sense that they might wonder how much you know of the job if you don't know what the salary should be. It could make you look inexperienced.

[sandra123]

When filing Chapter 7 bankruptcy the qualification timeframe is the previous month before the bankruptcy petition was filed looking back six months. Your new salary would have no effect on the qualification, but it should be reported to your bankruptcy attorney and let them decide what to do with it. Sometimes in the meeting of creditors, the bankruptcy trustee will ask that question. There are some people that make a large portion of their income during one time of the year because they might be on commission. These folks will usually time their bankruptcy filing so they can qualify. In reality, they have no way of knowing for sure what they will make in the future, although they could guess. Usually, it will have no effect on the outcome of your case. Honesty is the best policy. Good luck

[basketsbears]

Hi,

If you get the new job I would not "low ball" my salary needs to my employer. I would assume your manager is giving one month's notice, and it may take awhile to go through the process of replacing her. You would not want your new position's salary to be low to start with because you could just end up hurting yourself in the end.

Like you said this is all speculation, hopefully you can quickly file and have your 341 before this happens.

Best of luck! And always ask for higher rather than lower to start with.