Will the Bankruptcy Court take my income after I file a Chapter 7 case?December 26, 2013 | Category: Chapter 7
Q: Will I lose any of my income after I file a Chapter 7 bankruptcy case?
A: Your income earned post-bankruptcy filing a is not an asset that can be used to repay your creditors in a Chapter 7 case. However, contingent income that was substantially earned by you prior to filing a Chapter 7 case, but that is not or will not be received until after you file your Chapter 7 case (such as a sales commission or account receivable), can be an asset which the bankruptcy trustee may use to repay your unsecured debts.
Q: Will my business lose any of its income after I file a Chapter 7 bankruptcy case?
A: Your interest in any corporation may be a valuable asset that could be liquidated by the bankruptcy trustee in your personal chapter 7 bankruptcy case. The bankruptcy trustee will consider the value of your interest in your corporation on the day the bankruptcy case is filed. This value includes any existing, pre-bankruptcy contracts that your corporation is a party to. This value also may include any post-bankruptcy contracts to the extent that they affect the value of the corporation on the bankruptcy filing date. However, payments to the corporation on that contract, as well as payments to you for work performed post-petition on that contract, are not assets of the bankruptcy estate and cannot be seized by the bankruptcy trustee.
Since 1986, The Rothbloom Law Firm has served residents of Cobb, Fulton, Gwinnett, Paulding, Cherokee, DeKalb and all metro-Atlanta counties seeking relief from their business and personal debt. Our attorneys, Howard Rothbloom and Adam Herring, provide thoughtful counseling, careful planning and creative lawyering in bankruptcy cases filed under chapter 7 and chapter 13. Contact us today to discuss whether bankruptcy may be an option to relieve you of the burdens of business and consumer debt.