filing and getting new high-income job

[bkbkbk]

I will probably file ch7 in a month or two. At the same time, I am looking for a professional job that would put me well over the median income for my state. Also, I have had a mix of unemployment and half-time low-paying job the last 6 months or so.

Could getting a high-income job within a few months (either before or after) of filing ch 7 be a problem? Will they strictly apply the 6-month median income test even if part of the previous 6 months include a mix of no income, low income, and high income? Will they try to convert me to ch 13 if I get a high-income job within months or even a year after filing?

I need to know if I should try to time my job search and new employment like how it is suggested to time my finances according to when I file.

[CATCHMEIFYOUCAN]

If you planning on filing Ch7 to get rid of your debts, it would be wise to get that higher paying job after you've been discharged. OR even after your 341 meeting. They will want the last 6 months of paystubs to determine if you are eligible for Ch7 or Ch13. Its what ever disposable income you have leftover after all expenses. If you have no assets I believe the process is much easier, less investigating by the Trustee. Others will chime in here, but I'm sure they'll want more info if you care to share to give you tips!

Best of Luck, Catchmeifyoucan

[jp2861]

Wait until you have filed and been through the 341. The median is one thing to be concerned about, but you would probably be hurt the most by the additional monthly income you will have. The means test just says that your filing is not an abuse of the system and you qualify to file. Fast forward to part two: your actual monthly expenses. This determines the chapter you file for. Either way you'll fill out the expense and income schedules. If you take a new job you'll have to fill out your expense schedule to show that the majority of that new income is going towards expenses. If you can't show that, you'll more than likely be asked to change your filing to a 13 and use the excess income to pay debts. Take the new job after you file.

Once you file and debt is discharged they won't come back at you. Go out and make a million dollars if you can.

[tallberry]

I have a similar situation but my past 6 months has been fairly low, I am filing 2/1/08 and February is usually a strong sales month for me. However, March and April are slower sales months for me. Do I have to bring my pay stubs to my 341 meeting? Is there any other verification of income after filing? This would help me a lot even though I could justify my up and down income because it is like that all of the time due to the type of sales I am in. Any comments would be helpful...Thanks.

[FreshLikeADaisy]

Tallberry, after you file, the trustee will request various documents from you (or your attorney) that will definitely include paystubs, but probably also bank acct info, etc. So yes, there will be verification of income in that all of your financial info will match -- checks, stmts, pay stubs, running balances, etc. Also, that will make it clear to the trustee that you have varying income levels: your bank stmts will not show the same amt being direct deposited every two weeks, for example. It will be very clear that yours is not a steady "salary" sort of income. Hope this helps. Good luck!!!

[tallberry]

Thanks, Fresh. Sorry to rephrase this but I just want to make sure I am"getting" it. I already took all of my 6 months worth of paystubs, bank statements, w-2's, 2 years of tax returns, etc. to the attorney but what I am doing is letting my July '07 pay (which was a really good month from a different job) drop off and adding my January '08 (slower month with current job) to my 6 months worth of paystubs used for my means testing. This will depict a more accurate income amount for me. So if I file 2/1/08 and my trustee meeting is, lets say 3/1/08, will I have to give the trustee all of Februarys pay stubs even though my means test would be based on 8/07-1/08 ? Does this question make sense? Sorry if this is confusing...Thanks so much for your input!

[FreshLikeADaisy]

Tallberry, it makes sense. No, you only provide pay stubs, stmts, etc *as of the day you file*, unless specifically requested (highly unlikely unless there was a question of fraud for some other reason). Your bk is based on your finances on the day you file, so if you file 2/1/08, only January's stubs (and possibly the 1st of Feb) would be needed.

The date of the 341 meeting is actually irrelevant to most of this; its main importance is that it starts the 60 day clock in which creditors may object to the discharge of your debts. When you hear people say "wait til after your 341" they are generally referring to BIG changes in income, which can trigger the question of fraud in some cases. From the day you file until your 341, your case is very active in that it is being examined and reviewed by clerks, your trustees, etc. Things are being filed, notices are being sent, creditors are looking at your filing and filing notices and motions of their own, and if you have some large change in income in that period it is very likely to be noticed. Even if your trustee isn't looking at your credit report, for instance, your creditors likely are, esp if you were in collections anyway before you filed. This is in direct contrast to the post-341 period, which is more a waiting period in a no-asset Ch7 with little to no activity taking place after the trustee's report is submitted to the court.

Does that answer your question, or is it still not entirely clear? Please don't hesitate to ask.

[JollyGG]

We were in a similar situation with my husband looking for a new job. We filed sooner rather than later (and choose to deal with possible objections as they came). He was interviewing the whole time our bankruptcy was going on. Shortly after discharge he got a great new job.

We looked at things a few ways. We knew that if he got a new job, MABEY, we wouldn't have to file. However, he had been looking for a while and we decided that we couldn't plan our lives on mabey. We also knew that if he got a new job before the 341 and if we were asked about it at the 341 we may be in a Chapter 13. However, even a chapter 13 would be better than our current situation was. So we just decided to take our risks and file as soon as possible to reduce the likelyhood that a new job would even be an issue.

[tallberry]

Yes, Fresh, that helps a lot. I guess what I find concerning is that my old job that I left in July (due to my husband's job transfer) was high paying and consistent. My new job here in Florida is commission only and up and down constantly, so I didn't want to have a potential "up" month in February give an elevated view of my income. I think they will see that when I started in October it has been down and up literally back and forth each month (which is the nature of the business). If I understand what you are saying, it is still based on the average of the previous six months and my February pay would not really play into the mix. I am with Jolly, I would much rather qualify for CH7 but if it ends up a CH13 then, it is what it is. I was just afraid that with a CH 13 the trustee could see my up month and ask for more money, then when I have a down month we will be struggling to pay again. Geez...here I go rambling again. Sorry about that!

[FreshLikeADaisy]

No problem. Rambling is allowed. And yes, you have it perfectly right -- it's still based on the avg of the last six months and nothing earned after whatever day you actually file will come into consideration, even with your job and income changes as you have described them. Good luck!!!

[tallberry]

Thanks again, Fresh. I read a lot of your posts...always good sound advice. Just want you to know it's very much appreciated:o)

[FreshLikeADaisy]

You're a sweetheart to say so.

[LadynRed]

Could getting a high-income job within a few months (either before or after) of filing ch 7 be a problem?

Actually, it could. "Future income" CAN be considered based on some recent case law. Better to clear this with an attorney.

[FreshLikeADaisy]

Lady, would you be so kind as to state the case law you are referring to? I'd love to review it. Thanks.