Anyone with fluctuating income?

[reallynervous]

We may need to file under Ch13. Dh's job is mainly commission. His paycheck can vary within the same month and also varies with cycles (higher in certain months, lower in others).

I am wondering how these type of fluctuations in pay are handled in a CH13. Would it be set up so the payments are higher in some months (based upon historical figures)? If it is just an average, then I am guessing the assumption is made we would need to be putting money back during the higher paying months so we would have it to apply to our CH13 payments during the lower paying months?

I am just wondering as if this is the case, then I would think that we would need to consider this in relation to when we file. For instance, the upcoming months are a couple of dh's lowest paying months (Aug, Sept, Oct) so we wouldn't really have any money put back (unless we can exempt some - not sure yet if we will have the exemptions to cover what we do have saved up).

I think a CH13 would be pretty complicated with a commission job and was hoping to hear from others who are in that situation.

reallynervous

[IvoryAngel]

I think they use an average. Because my income fluctuates and we are doing an average for the 6mths. I would imagine it would be the same for Chapter 13.

[lrprn]

I am wondering how these type of fluctuations in pay are handled in a CH13. Would it be set up so the payments are higher in some months (based upon historical figures)? If it is just an average, then I am guessing the assumption is made we would need to be putting money back during the higher paying months so we would have it to apply to our CH13 payments during the lower paying months?

That is right, RN. The court assumes you will put back the extra money earned in good months to cover the bad months. Obviously the law of income averages is not a fool-proof system when you live on commision .

What some Ch 13 filers do is after their case is confirmed, they take on an extra part-time job that gives them just enough extra income to stay off the trustee's radar but provides some reliable income to save just in case. Ask your lawyer to see if this is a possibility in your case.

[HHM]

It depends on the trustee and how much of a solid history you can show the trustee. Strictly speaking, you can write a chapter 13 plan that has you pay more money in certain months and less in others. But, you would need a pretty good track record to get that kind of plan confirmed.

Also, in dealing the commission income, keep in mind, the court goes off of the last 6 months worth of income...so if you are planning on filing Chapter 13, you are probably better off filing near the end of the "lean" months so you can show the court less income.

[reallynervous]

Thank you for your replies!

reallynervous