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How getting a new job affects bankruptcy proceedings

| Sep 20, 2019 | Firm News

When a big North Carolina company files for bankruptcy, it is a big deal. A famous country club and golf course recently had to file for bankruptcy due to a string of hurricanes and litigation. 

Unfortunately, individuals do not have the same resources as a big business when facing bankruptcy. It is vital to begin bankruptcy proceedings as soon as you know you need it, but you need to be vigilant throughout the process. Honesty is of the utmost importance. If you get a new job while filing the paperwork and going to court, then you need to tell your attorney about it. 

A new job may not affect your ability to file for bankruptcy

Many people file for bankruptcy after losing their jobs and falling deep into debt. It can take several months for the court to approve your bankruptcy, and during that time, you may earn a new job. This may affect the outcome if your new job’s salary puts you over North Carolina’s median income, which would ordinarily render you ineligible for bankruptcy. 

However, the bankruptcy court typically looks at your average salary for the last six months. Therefore, if you were out of work for five of those months and only obtained a new job recently, then you may still fall under the median income. It is also possible for your lawyer to apply the North Carolina means test to show that even with your new job, you still cannot pay for all essential expenses. 

After a bankruptcy decision

In the event that you gain a new job a few months after a bankruptcy decision, you should still tell your attorney. Your lawyer will make the decision whether it is worth it to notify the bankruptcy court. It typically will not come into play because you could not have known about the new job at the time of filing. Other forms of income, such as an inheritance, may receive consideration. 

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