Legal Question in Credit and Debt Law in Missouri

Re: vsip

If you obtain severance pay before you file bankruptcy the severance will be a part of the estate and will be used for the benefit of the creditors. If you get your severance after the filing of the bankruptcy, but before the discharge of the indebtedness, again, that money will be used for the creditors. If you file bankruptcy, get a discharge of indebtedness, and then collect severance, I am not sure of how that would impact the process.

You cannot lie about the expectation of the severance when you file bankruptcy, and you are required to list all assets. You must truthfully disclose to your attorney all your assets, and your attorney has an obligation to verify these assets and the failure to do so can result in him being sanctioned.

The new bankruptcy law is very unfavorable to debtors. In most cases you'll be put on a 3 or 5 year plan to repay your debt. The process now requires that you enter into credit counseling before you file bankruptcy.

You may wish to consider credit counseling, getting some kind of repayment schedule under the credit counseling, and in that way defer filing bankruptcy which would allow you to keep the benefit of the severance when it is paid.

You should see an attorney who does bankruptcies for advise on this matter, and you should not rely on the suggestions offered here.