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Can trustee look at income made the month or 2, AFTER filing?

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Frequent Contributor

Can trustee look at income made the month or 2, AFTER filing?

I'm over halfway to discharge, and i guess i'm just going through 'what if' scenarios in my head while i impatiently wait out the next 6 wks.

 

I was about $7000 under the last 6 month income test for ch. 7 when i filed almost 2 months ago..  What if your past 6 months income as of TODAY is over the 6 month income limit for you and your state?

 

Can the trustee ask to see pay stubs/bank statements SINCE the filing date to see if income has increased/decreased?  If so, can trustee basically throw out my filed/submitted income at time of filing, and order me to submit a new 6 month income test?

 

Attorney never brought this scenario up at all.  I wasn't advised to NOT have a pay increase or to NOT work OT, etc...

Message 1 of 10
9 REPLIES 9
Valued Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?

Relax! It is as if filing date.
FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
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BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 2 of 10
Established Member

Re: Can trustee look at income made the month or 2, AFTER filing?

We ran into a similar situation. We're awaiting discharge and my wife got offered a pretty significant promotion, with a nearly 50% jump in pay effective today. Discharge is in September.

Attorney told us it only matters BEFORE the filing date, and obviously the point of the BK is to not ever have to do it again. More money coming in definitely helps with that.
Message 3 of 10
Super Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?

In Chapter 7 bankruptcy, the wages you earn after filing your case are not considered property of your bankruptcy estate. This means that the bankruptcy trustee can’t take them to pay your creditors. As a result, you are entitled to keep all wages you earn for work performed after your filing date. I had to temp. quit my second job and take no OT before filing. Case was filed and went right back to work. Once the papers are in thats it. Unless you win the lottery.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 4 of 10
Valued Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?


@FireMedic1 wrote:

In Chapter 7 bankruptcy, the wages you earn after filing your case are not considered property of your bankruptcy estate. This means that the bankruptcy trustee can’t take them to pay your creditors. As a result, you are entitled to keep all wages you earn for work performed after your filing date. I had to temp. quit my second job and take no OT before filing. Case was filed and went right back to work. Once the papers are in thats it. Unless you win the lottery.


According to the lawyer who represented my Niece in her filing, any income taxes returned could be taken, but likely would not be. Her filing was in October, so 3/4 of the year had passed, meaning the income tax overpayment was earned before filing.

TU fico08=824 12/29/19
EX fico08=819 01/14/20
EQ fico08=830 01/04/20
EX fico09=827 01/04/20
EQ fico bankcard08=846 12/24/19
Message 5 of 10
Valued Member

Re: Can trustee look at income made the month or 2, AFTER filing?

Hi OP,

 

 

I would not worry about income made *AFTER* (keyword) filing date. I recently filed and asked my lawyer about this same scenario and I was told not to worry. They worry about income made 180 days on the day of and prior to filing. They will generally look at finances extending 12 months prior and that is it. Once you have done your "Meeting of the Creditors" and there are no issues... You are free to go and improve your life. Just keep your head down, work hard and improve your financial situation.

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Message 6 of 10
Super Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?


@sarge12 wrote:

@FireMedic1 wrote:

In Chapter 7 bankruptcy, the wages you earn after filing your case are not considered property of your bankruptcy estate. This means that the bankruptcy trustee can’t take them to pay your creditors. As a result, you are entitled to keep all wages you earn for work performed after your filing date. I had to temp. quit my second job and take no OT before filing. Case was filed and went right back to work. Once the papers are in thats it. Unless you win the lottery.


According to the lawyer who represented my Niece in her filing, any income taxes returned could be taken, but likely would not be. Her filing was in October, so 3/4 of the year had passed, meaning the income tax overpayment was earned before filing.


As you remember. I had all my back taxes DC'ed. Filed in Aug. DC'ed in Nov. Filed my income taxes 3 months later. Got my full refund. No word from anyone. Life went on.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC at 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game. Pay it Forward!
Message 7 of 10
Valued Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?


@FireMedic1 wrote:

@sarge12 wrote:

@FireMedic1 wrote:

In Chapter 7 bankruptcy, the wages you earn after filing your case are not considered property of your bankruptcy estate. This means that the bankruptcy trustee can’t take them to pay your creditors. As a result, you are entitled to keep all wages you earn for work performed after your filing date. I had to temp. quit my second job and take no OT before filing. Case was filed and went right back to work. Once the papers are in thats it. Unless you win the lottery.


According to the lawyer who represented my Niece in her filing, any income taxes returned could be taken, but likely would not be. Her filing was in October, so 3/4 of the year had passed, meaning the income tax overpayment was earned before filing.


As you remember. I had all my back taxes DC'ed. Filed in Aug. DC'ed in Nov. Filed my income taxes 3 months later. Got my full refund. No word from anyone. Life went on.


It would be my guess, and it is just a guess, that it was included to prevent someone from increasing their witholding 6 manths prior to filing to pretty much hide assets...but that is pure speculation. It is also possible that the lawyer was just talking as well. He only said it was possible, but not likely. It was just included with some other info such as, any transfer to family members of real property would be looked at by the trustee. Basically it was a warning for someone who might be hiding assets.

TU fico08=824 12/29/19
EX fico08=819 01/14/20
EQ fico08=830 01/04/20
EX fico09=827 01/04/20
EQ fico bankcard08=846 12/24/19
Message 8 of 10
Frequent Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?

Thanks everybody.  I feel better about my concerns.

Message 9 of 10
Valued Contributor

Re: Can trustee look at income made the month or 2, AFTER filing?

This is completely off topic as far as getting a raise in income post-filing but pre-discharge but people should be aware that if you were to receive an inheritance during the 180 days after filing, the trustee is fully entitlted to use that money to offset creditor claims.   Again it's off topic but is meant to show that not all money coming in after the filing date is "safe" -- at least until you have that discharge order.

 

 

FICO 08: EX-698, EQ-738, TU-721 - [8/2/2019]
FICO 09: EX-748, EQ-785, TU-770 (8/2/2019)
Mortgage: EX-737, EQ-769, TU-761 - [8/2/2019]
NFCU NavChk 15K | NFCU Visa 50K | CapOne Venture Visa 50K | CapOne Savor 30K | Barclay Aviator MC 12.5K | Discover It 32K | Alliant 3% Cash Back Visa 25K | BECU CLOC 10K | BofA AK Air Visa 5K |Amazon Prime 10K.
239.5K Total Revolving. Alliant Car Loan 15K/31K
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 10 of 10
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