Bonus after filing

[Vandervecken]

I filed my Chapter 7 in late October. The trustee has continued the 341 meeting twice, and has now filed a motion to extend the deadline to object to discharge to May of this year. He is interested in a rental house that has some equity; this was anticipated by my attorney, and I have the ability to cash in an IRA and redeem the equity if necessary.

But now my employer has told me I will receive a rather nice bonus for a project, and the payout will be in two disbursements: May and November. The bonus is post petition obviously but if the trustee wins his motion to extend the deadline, can he grab my bonus as well? I've reached out to my attorney, but the court date for the motion is weeks away and the attorney is dealing with immediate needs first.

Thanks!

[leonel9]

Generally a discretionary bonus received after filing would not be part of the bankruptcy estate. I say generally because in the 9th Circuit it's pretty clear that if the bonus was earned (e.g. for work performed) during the period leading up to the petition date, there are procedures for calculating how much of it is a pre-petition bonus vs. post-petition.

I wouldn't go out of my way to bring this to the attention of the trustee, but be prepared to possibly surrender it if it was earned pre-petition. With that in mind, your attorney should be able to tell you what's common in your jurisdiction.

[Vandervecken]

The dates on the bonus paperwork clearly says it is post-petition (the project started the month after I filed) so this makes me feel better. Thanks!

[AngelinaCat]

Hi Vandervecken. I think you should be okay, but as always verify with your attorney.