Spouse lost his job so we qualify unless he goes back to work

[mintz]

This is a friend question and I'm not sure how to advise her. Her spouse just lost his job and they qualify under the means test for a chapter seven. He was told they may bring him back in a few months. With his job he does not qualify under the means test to file C7. He is over about $650.

If they file 4 to 6 months down the road and he does get his job back should he just keep his mouth shut and hold the checks until after they file, cash them or what should they do? How will they ever find out if he goes back to work?

My attorney tells me after we file, we can win the lottery (i wish) and it would not matter.

[Trixie007]

He can't just hold the checks - if he's back to work, he must disclose the income. Best thing to do would be to watch the 6 mos previous income, and file as soon as they are comfortably passing the means test.

[SubPrimeME]

This is a friend question and I'm not sure how to advise her. Her spouse just lost his job and they qualify under the means test for a chapter seven. He was told they may bring him back in a few months. With his job he does not qualify under the means test to file C7. He is over about $650.

If they file 4 to 6 months down the road and he does get his job back should he just keep his mouth shut and hold the checks until after they file, cash them or what should they do? How will they ever find out if he goes back to work?

My attorney tells me after we file, we can win the lottery (i wish) and it would not matter.

When you file they look back at the last 6 months of income. So if your friend's spouse is without income during this time, then they should be good to go.

As to hiding any money, I would strongly advise against that. They may not find out, but that is a roll of the dice that I would not recommend. Furthermore the case could be reopened at a later date- for whatever reason- and if the W2 is pulled or 1099 or what have you and they see the income....yikes!

[mintz]

Thanks, I will let them know. He THINKS they may bring him back in June or August but who knows with the economy.

How do they look back at the last 6 months income? If he does not have a check stub after February and they file in June, his last stub will be February?

[SubPrimeME]

Thanks, I will let them know. He THINKS they may bring him back in June or August but who knows with the economy.

How do they look back at the last 6 months income? If he does not have a check stub after February and they file in June, his last stub will be February?

Well they will look at last years tax return if filed- which they should get done soon! Thereafter if he hasn't worked, then they simply put that in the calculation- and the trustee can look at the state records to see if an active w2 is out on this person if they wish- or is it on the county level.. I forget. There is definetly trust from the filer- and if the trustee suspects something that's when they will do some deeper digging... I wouldn't worry about it, but I would defiently file at the lowest averaged out pay period of 6 mos. Keep in mind it may take a month or 6 in my case to get the thing filed!

[question]

I have a similar question... when looking at prior year tax returns will they question why your pay is less? I would like to file but I think now going back I am borderline with the median... if I work a little less to come under the median will that be a problem?