Full question:
I am a home builder. I will be filing a chapter 7 in a week. Can I be paid to build a home for a client beginning some short time after the filing and not pay the money to the trustee? It will be my income.
- Category: Bankruptcy
- Date:
- State: Texas
Answer:
The ability to retain income earned after filing for Chapter 7 bankruptcy depends on when the income is considered earned versus when it is received. Generally, debtors can keep income earned after the filing date, as only assets held at the time of filing are used to pay past debts. However, under certain circumstances, such as in Chapter 11 bankruptcy, income earned after filing but before the case is closed may be included in the bankruptcy estate.
According to § 541(a)(5) of the Bankruptcy Code, if a debtor acquires any interest in property after filing, they must report it within ten days of learning about it. This requirement continues even after the case is closed, although it does not apply in Chapter 11, 12, or 13 cases regarding property acquired after a plan is confirmed or the debtor is discharged.
Additionally, under § 341, debtors must provide current income evidence, including recent payment advice and statements for all accounts, during the meeting of creditors.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.