Job Promotion after filing?

[okiebk09]

what happens if you get a promotion at work after filing which pays more money? Does it matter?

[relief13035]

That's what happened to me. I received the first paycheck reflecting the raise 6 weeks after my filing date. I mentioned it to my attorney, told him the amount, but he didn't do anything about it. I wondered if it was because they do a 6-month lookback??? Mine was a sizeable amount, but not enough to put me into a Chapter 13.

[justbroke]

what happens if you get a promotion at work after filing which pays more money? Does it matter?

Shouldn't matter at all.

The reason is, that Congress chose to use a six-month "look back" period to determine eligibility!!!

It cuts both ways.

If you were going into a Chapter 13, it would matter.

[okiebk09]

so you guys are telling me that if we file jan 26th and my husband gets promoted feb 1 with a signifigant pay raise it does not matter as long as we qualify for ch7 when we file? wow. that is amazing. cannot imagine that they would not care.

[relief13035]

yes that is what we are saying. Congrats to you husband on receiving a promotion!

[okiebk09]

well he hasn't gotten one yet but he could possibly. the GM where he works said if he can hang in there for a couple of weeks he may have something better than his current position. not for sure but i was just wondering how that worked.

[CatsInTrouble]

whoa whoa whoa, now, are you sure? My attorney said that, at the trustee meeting, the trustee may want to see later bank statements... ie, statements from AFTER the filing. A raise and promotion would be shown, likely, on these bank statements......

Can you guys verify?

[AngelinaCat]

Hi Okie, 'Hub and I were asked at our 341 if we expected any money, such as, did anyone owe us anything; were we expecting an inheritence, that sort of thing. I did hope and expect to be hired full-time at a place I had put my application in to. But there was no guarantee that I would be hired, or even considered, so I answered "no" to those questions.

It seems to me that your husband is in very much the same position: i.e. there is a *promise* of a raise, but no guarantee whatever that he will get it, or eve be promoted. Therefore, in my way of thinking, unless you have it in writing somewhere, that he will move into the XXXX position at YYYYY rate of pay--it doesn't exist.

I just went back and re-read your last post; no, your husband has no guarantee whatever. If it was me, I would answer any question like this as a "no."

Good luck to you.

[justbroke]

whoa whoa whoa, now, are you sure? My attorney said that, at the trustee meeting, the trustee may want to see later bank statements... ie, statements from AFTER the filing. A raise and promotion would be shown, likely, on these bank statements......

Can you guys verify?

I think the key is... did it change as of the 341 meeting. You can speculate all you want, but it's not over until the fat lady sings to coin a phrase. Since the income change isn't imminent, how would you inform them? In a similar manner, why not predict a future lottery winning?

I have read some rumblings -- in the 5th Circuit -- that they sometimes consider post-petition pre-discharge increase in income a potential "abuse" under section 707. However, you'd have to actually start earning more income and that it is readily documentable (if that's a word).

Yes, at a 341, you may need to produce current financial statements and asked questions about any new property you acquired or inherited, but you don't know what tomorrow brings, unless you already have an award/judgment of some sort. A promise of a job is not a job. So, the answer to the question "do you expect more money in the future" is no.

[relief13035]

Exactly justbroke - A promise of a raise isn't a raise until it actually happens.

My 341 was on 11/26. As of that day, I had not received any additional pay. My raise became effective on 12/01 and I had to work through the 15th at the new rate. I didn't receive a paycheck that included the raise until payday on 12/20.

So at the 341, when I was asked "have you received any money, do you expect to receive an inheritence?", my answer was NO, which was the truth on 11/26.

[CatsInTrouble]

we're looking at some happy times AFTER the bankruptcy, but I guess you're right.... The raise and the backpay for it are all potentials until it happens!

I guess I'm owrried about it happening between the filing/6 month lookback and the Trustee meeting, cause it would probably put us over the median. Does that matter, or is the median solely solely solely at time of trustee meeting?

[lrprn]

yes that is what we are saying. Congrats to you husband on receiving a promotion!

This is NOT CORRECT.

Here's the reality whether it's fair or not - case law decisions made after the current bk law went into effect do allow trustees to take increased income that happens shortly after filing Ch 7 into consideration under certain circumstances when estimating disposable income. It's allowed so that trustees can investigate suspected bk fraud when filing (and I'm not saying that your husband getting a promotion is fraud...just saying that this prevents people from artificially reducing income for six months, then going back to regular income sources right after filing).

So let's say you file and your husband receives a 'significant' raise (usually this means making at least an additional 10% on top of what he made earlier) before your 341 happens. If your trustee asks you during your 341 if your finances have changed since you filed, you will have to answer 'yes'. Depending oin the district you file in, that could create a tough situation where your trustee may ask that this additional income be considered to see if you can be pushed into a Ch 13.

To avoid this, ensure that your husband does not get any of the raised income until AFTER your 341. Then chances are very good then that you'll be safe.

Be sure to ask your own lawyer (if you are using one) what he/she advises you do in this situation.