Overtime

[fallingfast]

Seems like we willl be filing Chapter 13 real soon. Will be meeting with a attorney next week. On my current job i work alot of overtime. It varies anywhere from 20 to 35 hour a payperiod(2 weeks). I been working OT for the last 3 years and it seem that we may have OT for "maybe" 2 years. After that i think OT will cease. I'm assuming my payment plan will be based on this income. The only thing is that my OT hours vary by pay period. How will they determine my income? will it be by average. if my income is based by average OT hours by the year, What happens if either my OT hours drop dramatically or if my OT hours increase . I determine the OT hours that i willing to work. Would it be best to limit my OT hours now or is it too late. is it worth working so much overtime or am i just killing myself?My wife is currently unemployed. SHould she look for a job now or wait till we start our payment plan? Will her income be affected. ? My kids will also start looking for a job, will their income be affected? I been reading as much as possible on this forum . This forum is so informative and has helped me deal with what's about to happen. I'm just starting the process and have soooo many questions.

[rjl0206]

You are somewhat in the same position as I am and have just one thing to tell you prior to filing. STOP DOING OVERTIME!! it may hurt and you may have to suffer a bit for about 6 months but as you said, you do not want your income based on your OT as it can fluctuate especially in today's economy. I asked this very same question to each lawyer I went to and they all concur that if I can make it without overtime for the next 6 months, even to just pay my mortgage, car insurance, food and NOT pay my unsecureds after I stopped using my cc's then fine. AFTER you file then you can continue on with your overtime, remember they base your income when you file for the 6 months prior to filing by looking at you past pay-stubs. you kinda want it as low as possible, because after all allowable expenses and such what ever is left over no matter if it is $1k or more the trustee will take it. Think about it like this, the more left over cash you have since your doing all that OT the trustee gets it all.

Ray

[justbroke]

As already pointed out, your payment is mostly based on your average income in the six months prior to filing. In other words, your OT and regular income will be averaged over that period.

Your disposable monthly income -- the part you must contribute to unsecured creditors -- will be based on that average, less allowable expenses.

If your OT ceases one day, then you'll have to ask for a change in your confirmed plan, but you can't do that until the payments stop.

You will need to learn to work within a budget. If your OT is higher for a period, you'll have to SAVE, not SPEND, the difference! Otherwise, you'll be in trouble when your OT decreases!

OT is the worse type of income, because it varies and it's not your normal income by any means (especially if your non-exempt and it's actually 1.5 or more times your normal rate of pay)!!!

[fallingfast]

Overtime

I guess i am screwed then. Been averaging about 24 ot hrs a pay period. I will be filing by next friday. I have no choice. I guess i will keep my OT hours down to a bare minimum till we start our payment plan and start working as much as possible as soon as plan starts. The other question i have is should my wife start working now or wait till after the payment plan starts. I will be asking my attorney all these questions on monday, just wanted to know before my meeting if anybody has any answers. when i get my attorneys answer i post them on here.