Increased Income After Filing in Chapter 7

[anonymuse]

I just wrote this as part of a response to a different post, but wanted to pose my question separately.

I was surprised when I asked a lawyer about future income increases while filing for Ch 7. My income for the 6-month pre-filing period is about $34k. Now that my job has changed from contractor to fulltime, my current income is $38K (which is still below the state median income). Although I love my job, the 3 hour commute is long (and expensive with gas) so I've always got one eye open for something closer, and, of course, with better pay. I used to make around $55K, but haven't been able to do the same since layoffs.

I asked the lawyer what would happen if i got back to my old salary--this would be about a 50% increase from my current income--after I had filed. He said IT DIDN'T MATTER!!!

You know, although I like the answer, I just don't think it makes sense since it isn't in the spirit of the way the BK laws were written. I would think that if I got to the 341 meeting and the trustee asks "Do you anticipate any changes in income?" and I said I have a new job starting in two weeks at $55K, I would think that I'd have to go to Ch 13 and be in a repayment plan.

Can someone explain the logic that I am NOT seeing? (Or at least point out in the law what I'm not understanding.)

[Bobby'sGirl]

The chap 7 lookback period is 6 months prior to the day of filing for income, still, I'd maybe worry if my new job started in the 4 - 6 weeks before the 341, but honestly, if it were not to start until after that hearing, anything could come up to keep you from taking it. So you could honestly say "nothing solid." Or you could have it for two months and find it is a horrible fit or the company folds or....get my drift? Remember, it is not just that magic "under the median" income figure; chap 7 is possible above it if valid expenses on means test would prevent your paying anything significant toward your debt. And it appears a chap 13 can be forced if at or under median and your expenses still leave some $$ for paying creditors. Several posters have told "horror" stories of that possibility. So if the attorney is comfortable with your fitting into a 7, try to get it into the works a soon as you can. If all this is keeping you up at night (creating interesting polls, I may add --- thanks!), wait until winter is bearing down to let "the network" or "headhunters" know you are available, and give a potential start date far enough after the 341 to be closer to discharge.
Maybe another poster can give you a link to some more concrete answers (if any are out there!) but seems a general cloud of confusion is letting different regions make things up as they go!! Not very reassuring to us BKers, is it??

[anonymuse]

So you could honestly say "nothing solid." Or you could have it for two months and find it is a horrible fit or the company folds or....get my drift?

Heck, the whole job thing scares me without even considering the bk factor. I fear two things that have happened to me in the past. Once, I went in for the first day of work at a job and they told me they weren't ready for me and would I like to start in a month????!!! (I threw a fit, said I moved here based on the letter of employment and had bills to pay immediately, and thus, started working immediately. And this was a fortune 500 company.) Another time, I had worked at a company for the summer as an intern, had the job offer letter in hand for the fall, arrived at work, and when I got there in the fall after a few weeks off they said they had run out of funding. I also thought I had a graduate assistantship lined up and found out that they had sent me the letter in error.

Getting together the money for a lawyer is driving me nuts. Hoping the home valuation comes in at the right amount is frustrating and that I pull the trustee that allows 10% sales costs instead of 7% is making me batty.

When you've gained the nickname "black cloud", you tend to try to evaluate all the consequences ahead of time to be prepared.

Right now, I'm having enough stress dealing with the whole BK thing that I think I'm just going to put the job hunt on the backburner right now anyway and this will become a non-issue.

And, then, thinking positively, I'll file for Ch 7, go through a successful 341 meeting, and then re-start the neverending job search. My case will close, I'll find that new job at my old (good) salary, maximize my 401K contributions, payoff my student loans and HELOC, put the rest in savings, and get on with my life.

[Minnymouth]

Sounds Like A Good Plan To Me!!!

[djk]

the forms ask about changes to income and expenses and you are allowed to comment on how you expect your income and expenses to vary after filing. I think everyone expects changes and therefore should use the lines to inform the COURT and Trustee. honesty is the best policy. if it matters or not is up to the trustee and judge, i would assume radical changes might have a greater effect on your case as it evolves.

[no_it_all]

The chap 7 lookback period is 6 months prior to the day of filing for income, <snip>

I believe the period they looked at is the last full month. If you file on June 28th, they look back to the last day of May, not to June 27th.

[anonymuse]

I went to another consult yesterday and he said that the other lawyer was downright wrong. He said to put off looking for any new jobs since any changes in income before my case was closed could really mess up my case--especially before the 341 meeting, but that the trustee could still be looking at my bank account until the end and that we all have a 1/250 chance of being auditted.

[Minnymouth]

My attorney advised me also, not to do any drastic job searches and income changes till after I was discharged...... Just creates a lot of unnecessary questions for the Trustee to get involved with and hold up your discharge.....

[scammer]

This is exactly how I was able to file. Lost my job at a wirehouse, spent the whole 2005 moving clients to my own firm. Had a total income for myself of less than $30,000, down from over $300,000. Now things are settling down my income has been climbing back for 06. Corporate politics have created the fire in my belly to never return to the large Corporation ever again. I never want to walk in and have the rug pulled out on their whim.