Hello...
I wonder if you might take a moment to address a question I can find NOTHING about in a city filled with actors, writers, directors and producers - many of whom I'm sure my question applies to. My better half, (an actress - I will call "Mandy"), is in the process of filing Chapter 7 (largely due to years of snowballing credit card debt). After turning in her paperwork listing her assets we were blindsided when her Trustee requested information about Mandy's potential future income in the form of residual payments for TV shows she appeared in prior to her filing date. We learned that the Trustee deemed this "potential income stream" as an asset to be declared and to be considered in the adjudication of Mandy's case. Full disclosure - Mandy did enlist the services of a local, newly-established attorney who assisted in filing the initial paperwork. However, he was very upfront in disclosing that he had little experience with bankruptcy and was caught as equally unaware as us when the issue of residual payments came to the fore.
As stated we were all surprised, but upon reflection, cede the basis for an argument that acting gigs indeed hold "potential" for future income - but the absurdity of it is that there is NO WAY to determine IF, WHEN and HOW MUCH that income might be. The factors that determine whether there would ever be future payments on any given production are so myriad, varied, and unpredictable that it is virtually impossible to value something that may or may not ever occur - at some point in the future. Not to mention that the residual payment structure for Screen Actors Guild is based on a very complicated sliding scale dependent on type of broadcast (cable, network, Internet, DVD sales and rentals, foreign broadcasts, etc., etc.), the popularity and demand for the given program (which determines frequency and geographic penetration of broadcasts), not to mention constantly renegotiated contracts between the Guild and the various Producers and Networks who pay the reuse fees.
Is there any advice, words of wisdom, experience you may have had with this, case law precedent - anything - you can impart to help us work with the Trustee to get her to grasp that these future earnings are potential at best and that there is no way to honestly and fairly value this as an"asset". Her current plan is to redirect to her all residual checks issued to Mandy from the payroll companies and then redistribute these monies to the debtors until the 50K debt is paid off. This presents administrative nightmares for Mandy for potential decades (as residuals often are issued for as little as pennies) and Mandy has no way to know that they are not cashing checks for residual income being issued for jobs booked after her filing date (payroll companies often combine several payments for various shows they represent into one paycheck). Also it's problematic from the standpoint that, like most showbiz folk, Mandy also collects Unemployment Insurance and is required to report VERY TIMELY weekly reports to the EDD reporting every cent that is issued to her in residuals and that if these checks are sent to the Trustee, she will have no way to fill out a Weekly Continued Claim Form with the income reporting demanded by the EDD (a bureaucracy that operates by strict rules and policies and one which getting a PERSON to communicate with is an impossibility).
Thank you very much for taking the time to reads this. I know it's loaded with questions so any of them that you choose to address at least provides more information that we had previously.
I wonder if you might take a moment to address a question I can find NOTHING about in a city filled with actors, writers, directors and producers - many of whom I'm sure my question applies to. My better half, (an actress - I will call "Mandy"), is in the process of filing Chapter 7 (largely due to years of snowballing credit card debt). After turning in her paperwork listing her assets we were blindsided when her Trustee requested information about Mandy's potential future income in the form of residual payments for TV shows she appeared in prior to her filing date. We learned that the Trustee deemed this "potential income stream" as an asset to be declared and to be considered in the adjudication of Mandy's case. Full disclosure - Mandy did enlist the services of a local, newly-established attorney who assisted in filing the initial paperwork. However, he was very upfront in disclosing that he had little experience with bankruptcy and was caught as equally unaware as us when the issue of residual payments came to the fore.
As stated we were all surprised, but upon reflection, cede the basis for an argument that acting gigs indeed hold "potential" for future income - but the absurdity of it is that there is NO WAY to determine IF, WHEN and HOW MUCH that income might be. The factors that determine whether there would ever be future payments on any given production are so myriad, varied, and unpredictable that it is virtually impossible to value something that may or may not ever occur - at some point in the future. Not to mention that the residual payment structure for Screen Actors Guild is based on a very complicated sliding scale dependent on type of broadcast (cable, network, Internet, DVD sales and rentals, foreign broadcasts, etc., etc.), the popularity and demand for the given program (which determines frequency and geographic penetration of broadcasts), not to mention constantly renegotiated contracts between the Guild and the various Producers and Networks who pay the reuse fees.
Is there any advice, words of wisdom, experience you may have had with this, case law precedent - anything - you can impart to help us work with the Trustee to get her to grasp that these future earnings are potential at best and that there is no way to honestly and fairly value this as an"asset". Her current plan is to redirect to her all residual checks issued to Mandy from the payroll companies and then redistribute these monies to the debtors until the 50K debt is paid off. This presents administrative nightmares for Mandy for potential decades (as residuals often are issued for as little as pennies) and Mandy has no way to know that they are not cashing checks for residual income being issued for jobs booked after her filing date (payroll companies often combine several payments for various shows they represent into one paycheck). Also it's problematic from the standpoint that, like most showbiz folk, Mandy also collects Unemployment Insurance and is required to report VERY TIMELY weekly reports to the EDD reporting every cent that is issued to her in residuals and that if these checks are sent to the Trustee, she will have no way to fill out a Weekly Continued Claim Form with the income reporting demanded by the EDD (a bureaucracy that operates by strict rules and policies and one which getting a PERSON to communicate with is an impossibility).
Thank you very much for taking the time to reads this. I know it's loaded with questions so any of them that you choose to address at least provides more information that we had previously.
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