Unpaid wage exemption

[freedomnow7]

Can someone help to clear this up for me: If I am filing tommorow (Wednesday) and I get paid on the following day (Thursday), do I have to include earned but unpaid wages on my schedule b and c (property claimed as exempt) for Thursday's paycheck?

Or, do unpaid but earned wages only apply up until the date that you file?

I'm in California.

[LadyInTheRed]

My attorney included earned but unpaid income as an asset and exempted it (system 2 wildcard exemption). Since my paycheck was direct deposited in my checking account the same day I filed, the only earned but unpaid income I had was accrued vacation time.

I think you will need to include all of Thursday's paycheck, unless it covers your pay for Thursday, in which case you could subtract one day's worth of pay.

[freedomnow7]

So, basically what I'm asking is if the exemptions apply only up until the BK is filed and not on wages earned AFTER filing.

[freedomnow7]

Okay, thanks LadyinRed. Were you able to keep 75% of it?

[LadyInTheRed]

Okay, thanks LadyinRed. Were you able to keep 75% of it?

I used exemption system 2, which has no exemption for salary. I used my wildcard exemption to exempt all of my unpaid salary and cash. It's system 1 that allows you to exempt 75% of your salary. If you are filing Chap 7 and using system 1, I think you will need to pay 25% of the salary to the trustee. If you are filing Chap 13, you will be able to keep it as long as you pass the liquidation test (over the life of your plan, your unsecured creditors will get paid at least what they would have received if your assets were liquidated under Chap 7).

[LadyInTheRed]

So, basically what I'm asking is if the exemptions apply only up until the BK is filed and not on wages earned AFTER filing.

Based on your screenname and another post, it looks like you filed a Chap 7. What you earn after the date you file is yours to keep.

[freedomnow7]

LadyinRed - I spent four hours today in LegalAid, and they did not give me as much information as you have in 10 minutes...thanks so much. I appreciate the help!!

[LadyInTheRed]

LadyinRed - I spent four hours today in LegalAid, and they did not give me as much information as you have in 10 minutes...thanks so much. I appreciate the help!!

I'm glad to help. I've gotten so much out of this board that I'm happy to pay it forward.

Keep in mind that my answers about earned and unpaid income is based on what my attorney put on my schedules and a quick review of system 1 exemptions. Since I used system 2, I can't say for sure how the 75% exemption works.

I was just reading your other posts and it looks like you don't own a home. If so and you plan to use system 1 for exemption, you should make sure System 2 isn't a better choice for you. System 2 has a homestead exemption of $22,705 and a wild card exemption of $1,175, plus any unused homestead exemption. So, if you have no home equity to exempt, you have a $23,250 wildcard exemption in system 2. There are other differences, so compare the two systems carefully before deciding which to use.

Some of the CA exemptions were adjusted April 1 and the adjustments are hard to find. If you haven't found the April 1, 2010 adjustements, read the post I just added to my blog.