Question about Federal Exemptions and Wages...

[JEM]

If one uses the Federal Exemptions instead of their state exemptions...are earned--but unpaid wages protected?

For example--if my husband and I filed on say a Tues....and he was expecting his paycheck on that coming Friday and it was going to be say $900--would the trustee want a portion of it?

In TX where we are at--it appears wages are protected---there are things that make the Federal exemptions a possibility for us to use, but the wage thing has me confused.

[BobMango]

Doesn't matter. What matters is what is in your account on the day you file. Many people plan their filing for a day or two before they get paid. That's exactly what I did, filed with $75 bucks in my main bank account on Wednesday, then got paid the following Friday.

Whatever wages you get after filing are yours.

[JoeBankrupt33]

When I filed in TX in 01, I used the Federal exemptions. My lawyer didn't ask about or list unpaid wages. If you really wanted to, you could probably include that under the wild card.

[JEM]

When I filed in TX in 01, I used the Federal exemptions. My lawyer didn't ask about or list unpaid wages. If you really wanted to, you could probably include that under the wild card.

Thanks! It always helps to have another Texan give their experiences!

Federal exemptions are looking more and more promising. Only because I think we might like to have a little cash saved up that we can exempt (like $1000)--and TX has good exemptions, but you can't exempt ANY cash.

We don't have any equity in the house (we're about flush with what we owe and what it's worth)

[mtbc]

Wages that you have earned and are due when you file are part of the bankruptcy estate. We listed a bunch of that on line 16 of Schedule B. Though, it would be nice to think that if you've done most of the work for the pay period but it's not quite over and the wages payment isn't actually due yet, then it's not an asset?

[DeadManCrawling]

Wages that you have earned and are due when you file are part of the bankruptcy estate. We listed a bunch of that on line 16 of Schedule B. Though, it would be nice to think that if you've done most of the work for the pay period but it's not quite over and the wages payment isn't actually due yet, then it's not an asset?

This is not ALWAYS true.

Some states have specific exemptions for earned but unpaid wages. Florida is one such state-actually I think the exemption here may cover wages in the bank AND wages not yet collected. Or some combination. The exemption here is for 6 months worth of wages up to a certain dollar amount. Few people, and few attorneys, unfortunately, are aware of the exemption and how to use it.

You may have an exemption, so check state law before assuming otherwise. It would be terrible to realize later you lost something else because you needed to protect wages that were already exempt.

It is important to know what can be exempted, and how to do it.

Best,

-dmc

[BobMango]

Wages that you have earned and are due when you file are part of the bankruptcy estate. We listed a bunch of that on line 16 of Schedule B. Though, it would be nice to think that if you've done most of the work for the pay period but it's not quite over and the wages payment isn't actually due yet, then it's not an asset?

Line 16 on Schedule B is for Accounts Receivable. So if you are a sole proprietorship then this would be the place to record your customer's debts to you. Maybe it depends on the jurisdiction, but our attorney advised us to file just before payday and we did not list unpaid wages. The trustee did not question it. I would think if the trustee could grab those funds they would be asking questions like, "when do you get paid", etc.

[mtbc]

This is not ALWAYS true.

Woah, of course you can sometimes exempt them, but you do not even have to list them as assets in the first place? Is there anything else asset-like like that where it doesn't have to be on Schedules B and C?

[JEM]

This is not ALWAYS true.

Some states have specific exemptions for earned but unpaid wages. Florida is one such state-actually I think the exemption here may cover wages in the bank AND wages not yet collected. Or some combination. The exemption here is for 6 months worth of wages up to a certain dollar amount. Few people, and few attorneys, unfortunately, are aware of the exemption and how to use it.

You may have an exemption, so check state law before assuming otherwise. It would be terrible to realize later you lost something else because you needed to protect wages that were already exempt.

It is important to know what can be exempted, and how to do it.

Best,

-dmc

See, I was kind of thinking along these lines.

I know TX protects earned, but unpaid wages.

My interpretation was that the Federal exemptions, did NOT.

[mtbc]

(As context for my previous comment, I should that of course even things you correctly list on Schedule C should be regarded as being effectively being in the bankruptcy estate when you first file until they're released back to you after the 341, in case there's some dispute over your exemptions.)

[BobMango]

This is from the Nolo Ch7 book

In my case I exempted the tax return but gave no thought to the unpaid wages.

As with many things in bankruptcy, it probably depends on the customary practice in each district. Given that you provide 60 days of pay stubs they certainly know how much and when you get paid. I suppose an especially aggressive trustee might go after it if you don't exempt them.

[DeadManCrawling]

Again,

This may be a district specific thing. The differences are absolutely maddening. In our case, we have SS income for one child. This was not listed on the means test and was not included on ANY schedule.

I asked our attorney about it and he said this: Any exemption is exempt for the entire case. In this district we do not exempt some things for the means test and then put them back in for the schedules.

He did say this also applied for the Florida head of household wages. We had some, probably, but he did not even ask me to guess at a figure. Exempt is exempt, as he said. None was included on any list or schedule, or for the means test.

As I and others have noted, these district-specific particularities seem just WRONG. Federal law should be applied universally. One over-arching Supreme Bankruptcy Court would be a good idea I think. Or maybe not, that could cause a large shift in power toward the federal side, which would tear at the constitution and erode state's rights. More intricate trivialities that could be disaster, I guess.

Anyone else have this type of thing in their district? It might be a good reason to start another forum topic. "District By District" case-law and interpretations. I could see that being very useful.

[ItIsWhatItIs]

Bobmango states above that we need 60 days pay stubs. My attorney is requesting 6 months. Do I really need 6 months of pay stubs. I haven't been really good about keeping them in one place. 60 days would be much easier :-) I just retained him and can't confirm this with him, as it is the week-end.

[lrprn]

Bobmango states above that we need 60 days pay stubs. My attorney is requesting 6 months. Do I really need 6 months of pay stubs. I haven't been really good about keeping them in one place. 60 days would be much easier :-) I just retained him and can't confirm this with him, as it is the week-end.

The number of months of pay stubs required varies between bk lawyers (who want to be certain you've disclosed all your income) and trustees (who also want to be certain you've disclosed all your income). Asking for the last six months of pay stubs is actually the norm. A few locations ask for just the last two months.

If your lawyer says you need six months of pay stubs, then you need six months of pay stubs. If you don't have them, then request copies of those you are missing from your employer(s) and from any other source of income over the six months as soon as possible.

[ItIsWhatItIs]

Thanks Irprn for your reply. Do you think it would matter if I am missing a couple of the stubs during the last 6 months. All my stubs have year to date. I work for a dentist who does his own computerized payroll. I don't know how happy he would be if I asked him to deal with getting me copies and why I would tell him I need them. I may only be missing some random paystubs. Again, I appreciate you taking your time to help me! PS I see yours took 3 years, is this norm for ch 13?? Yikes...