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Income earned after filing, and before discharge

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    Income earned after filing, and before discharge

    As I understand, I will file for bankruptcy describing my financial situation on the date of filing. What if, after filing, I were to open an LLC for a service-based business with no overhead, and earned more income than I had been earning prior to filing ? How would that affect my case? Would this be of concern during the time between filing and the 341 meeting only, or would it be a concern all the way until discharge ? Even after discharge ? Thank you for any insight you can provide !

    #2
    As far as a Chapter 7 is concerned, it really has no impact.

    A Chapter 7 is a snapshot of your financial life prior to the date that you filed (and the days preceding your filing). I would personally wait until after the discharge in order to establish any new business, but nothing would stop you from doing so. In extremely rare cases there could be some complexity but only as far as the Trustee may be concerned. This would only be if your income changed drastically between filing and the 341 Meeting because you will (more than likely) be asked, at the 341 Meeting of Creditors, whether your income changed.

    There is nothing concerning about earning money after discharge.
    Last edited by justbroke; 03-04-2017, 09:48 AM.
    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

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      Your filing does represent a snapshot of your finances on the day of filing. Generally, post-petition income isn't a concern as long as it was not earned prior to filing. If your income significantly changed to the point where you might not be qualified for a Chapter 7 bankruptcy, and able to make payments in a Chapter 13 case (e.g. if you filed while unemployed, and then accepted a $200k job the day after filing), and this information became known, your case could be converted or dismissed.

      If your income simply increases after filing and you are still qualified for a Chapter 7, I wouldn't worry. Besides, will you be able to say with certainty what your new business will earn?

      I would consider waiting until after your 341 meeting to open new business bank accounts. If you do, you may be opening the door for questioning about your new business, how much you make, etc.

      Comment


      • leonel9
        leonel9 commented
        Editing a comment
        Did not see Justbroke's reply (I took too long to type). I agree that there's a low chance of post-filing income creating a problem. I'd rather be safe than sorry.

      #4
      Thank you both so much, Justbroke and Leone19 ! Can you say how long it typically takes after 341 until discharge ?

      Comment


        #5
        The last day to file a complaint on dischargeability is the 60 days following the first (scheduled) 341 Meeting. The discharge could be automatic on day 61, or will take several days based on your District and how busy they are processing discharges.
        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

        Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

        Comment


          #6
          Thank you for your replies, justbroke!

          Comment

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