2020 Best Invention

Bonus Season?

1 minute readUpsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool


In a Nutshell

‘Tis the time of year when some employers pay out bonuses to their employees. If you’re expecting a bonus - congratulations, that’s awesome! But, you probably have some questions on how this impacts your bankruptcy filing, especially if you were planning on filing soon.

Written by Attorney Andrea Wimmer.  
Updated December 4, 2020


Happy person with money in their hand and floating around them.

‘Tis the time of year when some employers pay out bonuses to their employees. If you’re expecting a bonus - congratulations, that’s awesome! But, you probably have some questions on how this impacts your bankruptcy filing, especially if you were planning on filing soon. 

If you receive the bonus the same month you’re filing in… 

… then it’s not counted on the means test. For more on how your income is calculated for means test purposes, check out the linked sections in our articles on the income limits and the means test calculation.

… it’s an asset that you have to list on A/B. This of course sounds more complicated than it needs to. What it really means is that you have to make sure to update your bank account balance on your Schedule A/B

Next, you’ll want to make sure that the full amount in your bank account is protected by an exemption. The best way to do that using your Schedule C is explained in this article

If you plan on filing next month…

… your bonus income is included in the means test analysis and may cause your income to exceed the median income for your state. If that’s the case, and you can’t wait to file until the bonus “falls off” again, it’s best to talk to a bankruptcy lawyer in your area. It doesn’t necessarily mean that you won’t be able to file (with or without a lawyer). But, to avoid having to file multiple cases, you’ll want to make sure right out of the gate. 



Written By:

Attorney Andrea Wimmer

TwitterLinkedIn

Andrea practiced exclusively as a bankruptcy attorney in consumer Chapter 7 and Chapter 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team as Managing Editor. While in private practice, Andrea handled... read more about Attorney Andrea Wimmer

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener or read our bankruptcy F.A.Q. to see if Upsolve is right for you.

Take Screener
6,098 families have filed with Upsolve! ☆
or

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Bankruptcy Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

News

    + Show Articles

    Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

    To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.

    Close

    Considering Bankruptcy?

    Try our 100% free tool that thousands of low-income families across the country have used to file bankruptcy themselves. We are funded by Harvard University, will never ask you for a credit card, and you can stop at any time.

    File Bankruptcy for Free