Up to a year?

[cloudship]

In a couple of threads it was mentioned that the trustee can open a case back up up to a year, and that they can take anything you do get even after a bankruptcy is discharged? Is this so? If yes, what is the point of a discharge?

[HHM]

The can't arbitrarily re-open your case. Generally, if you recieve a windfall within 6 months of discharge (i.e. large inheritance, lottery, etc), you are supposed to inform the court and they can reopen you case.

Most of the time, a trustee reopens a case because they discovered you did something wrong, i.e., hid assests, etc.

[Pinktiger]

Does this apply to money you earn as well as win or inherit? I am a real estate agent, and I have a listing that could garner me as much as $9,000 if I sold it myself. Could the trustee take this if it came within the six-month window?

[FilingOnMyOwn]

I'm pretty sure in a chapter 7 you can make and keep whatever income you are capable of after you are discharged with few exceptions such as lottery winnings etc. My only question would be, how much debt are you in that you couldn't pay off if you can make thousands off a single sale? Hasn't real estate been hotter than ever in recent years?

[Pinktiger]

That is really immaterial, isn't it? I was just wondering about the cutoff period, not wanting to open an inquiry into my personal business. But just to let you know, even a $9,000 commission wouldn't fix me. And the only way to get that would be to sell it myself, and not have it sold by another agent.
The real estate market is good in some places, and it is good here; but you can never count on a sale. Never.

[StaciMM]

My understanding is earnings after filing are clear. But, if its something that was in the works already-its part of the BK estate. If you had a buyer lined up before filing, who closed & the commission was earned after filing, that commission would be part of the BK estate. If everything in the transaction comes after filing, that's a different story.

Pink-I hope it works out for you. Of course you can't bank it til it happens!

[Pinktiger]

Pink-I hope it works out for you. Of course you can't bank it til it happens!

Thanks for the good wishes -- and thanks for the information. I sort of figured that was the deal, but I've been reading on here about people saying the trustee told them not to cash income tax refunds, etc. I have a problem understanding how that money, the income tax refund, doesn't fall under the same category as money I make in a sale that happens after the filing.
I probably won't be getting a refund; I always pay. But it makes me wonder. What qualifies as a windfall, then? How is an inheritance not the same as earnings? I guess I"m just confused about the law.

[AAAArt]

Pink, If you're considered self-employed and receiving a 1099 on commissions and paying SSSe Tax, like I did for many years, then you already understand that the rules for the IRS don't make sense.
However, for those who are employed, receive a "regular" salary and have withholding (which they can adjust), here is what I believe happens. Many of those people use their withholding as a kind of self-imposed savings account...that would make it an asset. Also, it would be possible to change your exemptions to have more withheld a few months before the BK, which would lower your net income, and create an asset which you had merely deferred to a later date. I think that is what and why the Trustees get interested in tax refunds from Oct. - March or so.
I haven't received a refund in over 30 years and won't this year either...so it's somewhat of a different kind of thinking than you and I do, where we just hope we don't owe the IRS too much.
Re: your possible commission. First of all congrats! Secondly, I'll go before the Trustee and argue for you. I once drove 100 miles, made a sale that would have earned me about $1000 in commission, stopped on the way home and bought my wife a dress (times had been tight and she reallly wanted it) and when I got home, my wife told me that the client had called and cancelled the sale! Commission money is never sure. Even if the check is cashed and cleared the bank, in some cases there can be chargebacks from the company if something later falls through.
Best of luck. Art

[StaciMM]

A refund you receive in the spring of '06 is based on the calendar year '05. So its money you earned and overpaid thru payroll deductions from Jan. 05 to Dec. 05. The trustee can claim part of the refund to cover the part of the year before you filed.

Thanks for the good wishes -- and thanks for the information. I sort of figured that was the deal, but I've been reading on here about people saying the trustee told them not to cash income tax refunds, etc. I have a problem understanding how that money, the income tax refund, doesn't fall under the same category as money I make in a sale that happens after the filing.
I probably won't be getting a refund; I always pay. But it makes me wonder. What qualifies as a windfall, then? How is an inheritance not the same as earnings? I guess I"m just confused about the law.

[StaciMM]

Ps-about the inheritance...

An estate is usually not always tied up nice & neat & quick. Receiving the inheritance money usually comes a while after the relative (etc.) passes away. So if you receive an inheritance within a short period of time after filing, the trustee is going to want to know all about it-in case it is something that started before filing. (If the person who left you the inheritance passed away unexpectedly the day after you filed, I don't think the trustee could touch it. But he'll want to know all the details just in case...)

[Pinktiger]

Ahhhh. Thanks, Staci. And Art -- you are so right about not counting on the commissions until the deal is done -- and even then!!!
I'm a part time realtor -- I am employed by a university where I teach, and my salary is low; but I do have a couple of listings and I do sell property -- I'm hoping this year to finally make a little money and supplement my meager salary, which is what it is supposed to do.