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Bonuses post filing

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  • Bonuses post filing

    If I were to file in December, my previous 6 months of income won't show a bonus I receive in January, and another one in I receive in March as income.

    Does that mean that if I get that bonus in January / March 2010 (post filing) that I will be able to keep it?

    I've heard different things from lawyers regarding the question - I thought I'd gather some thoughts from the board.

    Thanks

  • #2
    not trying to be evasive but every trustee and district handles this situation differently so the best person to ask this question to is your attorney. There is no 1 rule fits all on this question.

    Comment


    • #3
      Originally posted by ArizonaBK13 View Post
      If I were to file in December, my previous 6 months of income won't show a bonus I receive in January, and another one in I receive in March as income.

      Does that mean that if I get that bonus in January / March 2010 (post filing) that I will be able to keep it?

      I've heard different things from lawyers regarding the question - I thought I'd gather some thoughts from the board.

      Thanks

      you will have to disclose the possible future bonus on your Trustee questionaire and you will have disclose past bonues as well. I believe our asked about bonuses for the last 2 yrs. So you whether its included in your 6 mo lookback/income is questionable but you will have to disclose both.

      Filed July 09
      Confirmation - June 2010
      Final Payment - June 2014 - 7/2/14 DISCHARGED

      Comment


      • #4
        Our lawyer said because we had a consistant bonus over the past few years that it had to be calculated into our income for the upcoming year. The average was used and added into our monthly income. We make our monthly payment based on the bonus that is coming. When the bonus is here we get to keep it because we have been making monthly payments as if we already had it. Does that make sense? I would own up about it to your lawyer and let him/her tell you if you need to report it. If the trustee finds out down the road, he/she could throw your BK out right there and then you will be back to square one.

        Comment


        • #5
          As stated, a bonus is "disposable monthly income" (DMI) and is subject to the control and supervision of the Trustee for distribution to the unsecured creditors.

          Having wrote that, some Trustees really don't care what happens with your income post-confirmation so long as you're paying on time and there are no problems.

          In many Districts, however, your income tax return is reviewed to see if you are earning more. If the bonus is relatively insignificant (less than say 10%), they are likely to ignore it. If it's a significant portion of your income (> 10%), expect that the Trustee may seek to modify your confirmed plan!
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog


          I am not an attorney. Any advice provided is not legal advice.

          Comment


          • #6
            Not sure who your trustee is, but I filed in AZ and my trustee requires us to file our tax returns each year - if your bonus is significant and at the end of the year your income is 10% more than it was last year, they may require you to pay in that bonus or at least increase your payments. Not sure if the size of tax refund you're talking about is that much or if it's small in the scheme of things, but something else to think about... I'd definitely ask your attorney

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            • #7
              I never had to fill out any trustee questionaire that I can remember. Nothing was ever mentioned about a bonus I received prior to my 6 mths look back (paystubs). I mean it will show up on my tax return as part of my income but it was also in last years total income... I guess I will just cross that bridge when I get to it..
              Those who live in glass houses should not throw stones
              Chapter 13 filed 10-21-09
              Discharged 4-13-15

              Comment


              • #8
                Justbroke gives good advice. Our lawyer told us that as long as our income didn't jump suddenly (over 10%) on the tax return that we should not worry about small raises, little bonuses, etc. That being said, just touch base with your attorney and assume that you'll be living without the $. Then if you get to keep it, you'll be pleasantly surprised!
                over $100K cc debt,$20K taxes,$332K mortgages/value $190K,surrendered
                Confirmed, $801/month 56 down,4 to go

                Comment


                • #9
                  Originally posted by Ifonly View Post
                  Justbroke gives good advice. Our lawyer told us that as long as our income didn't jump suddenly (over 10%) on the tax return that we should not worry about small raises, little bonuses, etc. That being said, just touch base with your attorney and assume that you'll be living without the $. Then if you get to keep it, you'll be pleasantly surprised!
                  As others have advised, you need to directly ask your lawyer about this and also any future adjustments to your income during your Plan years. What happens to one person posting on a forum may not happen to you. No district or Chapter 13 plan is the same. Your finances fall under the control of the Trustee during your plan years and if your income fluctuates above or below what was given at the time of filling, your attorney needs to be informed. Some want to know everything, some state, as indicated by the previous poster, a percentage to go by. Everyone in a Chapter 13 usually encounters this either with a tax refund, bonus, raise, inheritance, or some other source of funds/income coming in over and above regular income. Check with your attorney at retention how to handle as/if the situation arises. Most find out they are able to keep most, if not all, of the additional funds.
                  _________________________________________
                  Filed 5 Year Chapter 13: April 2002
                  Early Buy-Out: April 2006
                  Discharge: August 2006

                  "A credit card is a snake in your pocket"

                  Comment


                  • #10
                    Without the bonuses added to my income, I already have a positive Monthly net income (after taking into account Schedule J).

                    I'll figure out how to disclose the potential bonuses, but it doesn't sound like that buys me any more money I can keep if/when a bonus comes in since I'm already positive monthly net income prior to receiving any bonus. Right?

                    Comment


                    • #11
                      Originally posted by ArizonaBK13 View Post
                      I'll figure out how to disclose the potential bonuses, but it doesn't sound like that buys me any more money I can keep if/when a bonus comes in since I'm already positive monthly net income prior to receiving any bonus. Right?
                      Right.

                      Unless your plan is one that pays back 100% to your unsecured creditors, and if (and that's a big if) your Ch 13 trustee is one of the few that will take all or part of your tax refunds and all of your bonuses after filing for the length of your plan, then those tax refunds, bonuses, etc just increase the payback % going to your creditors. It doesn't shorten your plan by even one day, and it doesn't increase the money you can keep.

                      However, hopefully you'll be lucky and have a trustee that only wants some or none of your tax returns, bonuses, etc and you will get to keep the extra. It all depends on your trustee. During your free initial consultations, this is a great question to ask as you interview the 3-4 experienced bk lawyers in your area.
                      I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

                      06/01/06 - Filed Ch 13
                      06/28/06 - 341 Meeting
                      07/18/06 - Confirmation Hearing - not confirmed, 3 objections
                      10/05/06 - Hearing to resolve 2 trustee objections
                      01/24/07 - Judge dismisses mortgage company objection
                      09/27/07 - Confirmed at last!
                      06/10/11 - Trustee confirms all payments made
                      08/10/11 - DISCHARGED !

                      10/02/11 - CASE CLOSED
                      Countdown: 60 months paid, 0 months to go

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