Actual evidence wanted - new job prior to 341 meeting

[checkinout]

We are currently going through a similar scenario...hubby was unemployed 3mos prior to filing & received job offer between filing & 341. The trustee asked if he had found a job yet & questioned the pay. We informed the trustee that the pay would be "similar" to previous income---we were also asked if the numbers used to file reflected employed income or unemployment insurance income.
That was a little over a month ago, so we are about a month out from discharge? We have not heard anything except trustees report of no asset/no distribution, but UST known for chiming in at the last minute.
I'll keep you posted...

You let them know that the reduced income from unemployment was used when filling out the paperwork and the trustee didn't question that? Did he/she comment any after that?

Guess that's a good sign!

[jodabrooks]

You let them know that the reduced income from unemployment was used when filling out the paperwork and the trustee didn't question that? Did he/she comment any after that?

Guess that's a good sign!

There were about 2 mos of unemployment included in averaging the income and the trustee did not question us further...so, yes hopefully that was a good sign!

[gman]

Given these recent court cases - I would not risk taking a new job prior to a 341 hearing.

See this thread for details:

http://www.bkforum.com/showthread.php?t=61498

I am not a lawyer - just my humble opinion.

[checkinout]

Given these recent court cases - I would not risk taking a new job prior to a 341 hearing.

See this thread for details:

http://www.bkforum.com/showthread.php?t=61498

I am not a lawyer - just my humble opinion.

The thing that sounds good on that is these were both Chapter 13 and related to the projected DMI and how much the debtors could pay back. I didn't see anything in either of those cases to tell that would also apply to Chapter 7.

[jodabrooks]

There were about 2 mos of unemployment included in averaging the income and the trustee did not question us further...so, yes hopefully that was a good sign!

oops...my bad...had to actually go back and look at the forms...
actually the UI insurance was not used to compute the average/projected income, only the prior employed income.

[gman]

The thing that sounds good on that is these were both Chapter 13 and related to the projected DMI and how much the debtors could pay back. I didn't see anything in either of those cases to tell that would also apply to Chapter 7.

The cases apply to the BAPCA law - so I am 99% sure they apply to either a Chapter 7 or a Chapter 13.

Specifically - they apply to Schedules I & J - which appear in both forms of bankruptcy.

The reason I point this out is that there will be some debtors who pass the Means Test for a Chapter 7 - but end up having a completely different DMI for Schedules I & J - and end up getting pushed into a Chapter 13 plan.

If I end up finding a job before my 341 hearing - I can easily see a Trustee arguing that I passed the Means Test but end up having to do a Chapter 13. For this reason alone, I will attempt to not get a job before my 341. Crazy, but that's the way the system works.

[gman]

I found a case where the debtor found a job between filing and the 341 hearing.

Taking the job was disastrous for the debtor....



Source:

http://www.georgiabankruptcyblog.com/archives/miscellaneous-cases-5th-cir-chapter-7-case-may-be-dismissed-for-substantial-abuse-based-on-postpetition-events.html

[checkinout]

That link states that is in the PRE BAPCPA version.. I sent that link to my attorney and she reaffirmed that I shouldn't have anything to worry about as long as I didn't know about the new offer or job on the date of filing. I have my offer letter dated almost 2 weeks after filing and that should be enough to quash that. Maybe different districts are more strict than others...

[gman]

I found another case - this one from Florida - where a Debtor took a job AFTER filing and BEFORE a 341 hearing.

The Trustee objected - and the Debtor was forced from a Chapter 7 to a Chapter 13.

Link:

http://www.katzlawoffice.com/bankr/zz006In%20re%20Henebury.pdf

[gman]

Found 2 more cases and neither turned out well for the Debtor who took a job between the filing date and the 341.

Source:

http://www.garystickell.com/articles/pdf/means-test-four.pdf

[Fallonedward]

"Has anybody been aware of a trustee converting a Chapter 7 filing to a Chapter 13, or completely dismissed a case due to gaining employment after filing but before the creditors meeting?"

I have been in this business for over 2 decades and in that time I have never had a case (Chapter 7) where finding future employment (before or after the 341) was relevant unless having such employment was known on the filing date.

I sure hope this statement works for us, in case my hubby find a job between filing and our 341. Since we can not file till November, I'm thinking unless he finds something in October, he probably will not find something till the new year, since most companies shoe up their finances going in to year end close

[gman]

I sure hope this statement works for us, in case my hubby find a job between filing and our 341. Since we can not file till November, I'm thinking unless he finds something in October, he probably will not find something till the new year, since most companies shoe up their finances going in to year end close

I too cannot file until Nov 1....as I am an over-the-median filer and must wait for income to drop off and finally pass the Means Test on Nov 1.

With that being said, if possible, this a possible strategy for what it is worth - AND I AM NOT A LAWYER SO THIS IS PERSONAL ADVICE ONLY:

1. Find some "consulting work" that does not jeopardize your husband's my Means Test calculation.

2. This same consulting work will also be the basis of your husband's "projected income" as (a) your husband will no longer be taking unemployment and (b) your husband will not have a full time job. I am treating this like a self-employed business because it actually is.

3. The consulting work income counts in the month the income is RECEIVED - not in the month he does the work. This is important, so if he can plan to get paid in Oct vs Nov vs Dec make sure to plan accordingly.

4. The consulting work will NOT generate a lot of income between filing and the 341. Again, this is something he can control (by not accepting too much work and/or waiting on payments for work completed.)

5. What happens after the 341 is fair game - from all I have heard.

6. If no work is available, then and only then you might consider cracking IRA and/or 401k money as many recent court cases have decided that this is NOT income on the Means Test.

Being self-employed does require one to show the court a Profit & Loss statement going backwards 6 months from date of filing.


If anyone has ideas to add - please do so....

Best of luck to you!

[tcreegan]

BK code vague

Hi all, I have been over the BK code a couple times and the code is nicely vague about the issue of getting a job between filing and discharge/closing:



The only other thing I can see that applies is that the trustee/court is able to look at "bad faith" and "totality of circumstances" in a BK case. 707(b)(3)

Vague language = judicial discretion

meaning that in different courts, different judges might arrive at different decisions

Here is where you need to rely on a local attorney familiar with the habits of the trustees and the decisions of the judges.

Trying to shed some light through the mud,

Tom in Colo

[tcreegan]

job before 341

Hi everyone, I've been over the BK code a couple times and these are the only things I have seen that relates to getting a job after filing and before discharge:





The problem is the vague language. Vague language = judicial discretion

Judicial discretion = different decisions by different judges in different courts

Here is where a local attorney familiar w/ local trustee habits and local court decisions earns their pay...

Trying to shed some light into the mud,

Tom in Colo

[checkinout]

Well the 341 came and went, and all is good. The 3 people who went before me seemed to get grilled pretty hard, but I think that was because their attorneys made some mistakes with the schedules. Watching those got me super nervous, but I was up in the chair for around 2 minutes or less. He asked me maybe 5 total questions after my attorney asked me 10 or 15 standard ones. Asked when I lost my job but not if I had gotten another one. Even though 2 previous people said they had been unemployed and he did ask if they were still.

Meeting was on a Friday, and Monday morning PACER showed the Trustee's report of no distribution.

Happy!