Urgent Help Needed

[coopersmydog]

Really need some timely expert advice. I thought I had the timing of my filing all figured out, but when I went to go over all the details with the attorney, I was given a huge surprise. After going over some other things with the attorney I'm really not sure if he's worth a damn or not. If anyone can give me some advice on the below I'd really appreciate it.

1. If I receive a bonus payment on March 6th, but the pay stub says it was for the pay period ending February 25th, does that count as Feb or March income for the means test?

2. If I started a healthcare spending account on January 1 for $250/month, do I get to claim the entire 250 on the means test, or can I only claim the average for the last 6 months (which would be $125/month)?

3. I have a cell phone expense of $175/month, but have no land line. I also have propane expenses and electric/water/trash that total about $400/month. Can I claim the amount over the national standard even though some of the expense is for a cell phone?


One last thing. If I've already paid this attorney $1500 + $274(filing fees), and he's completed the means test paperwork, and basically all paper work that's required to file, is there anyway I can recoup some of that money if I decide to fire him. There's a long story with how I ended up having to use him, but I'll spare you the details.

[coopersmydog]

Urgent Help Needed

Really need some timely expert advice. I thought I had the timing of my filing all figured out, but when I went to go over all the details with the attorney, I was given a huge surprise. After going over some other things with the attorney I'm really not sure if he's worth a damn or not. If anyone can give me some advice on the below I'd really appreciate it.

1. If I receive a bonus payment on March 6th, but the pay stub says it was for the pay period ending February 25th, does that count as Feb or March income for the means test?

2. If I started a healthcare spending account on January 1 for $250/month, do I get to claim the entire 250 on the means test, or can I only claim the average for the last 6 months (which would be $125/month)?

3. I have a cell phone expense of $175/month, but have no land line. I also have propane expenses and electric/water/trash that total about $400/month. Can I claim the amount over the national standard even though some of the expense is for a cell phone?


One last thing. If I've already paid this attorney $1500 + $274(filing fees), and he's completed the means test paperwork, and basically all paper work that's required to file, is there anyway I can recoup some of that money if I decide to fire him. There's a long story with how I ended up having to use him, but I'll spare you the details.

[EricaCallaha]

1. It is counted from when it is received by you. So if you get a bonus on March 6th, it counts for March even though it is for the pay period ending Feb 25th.

2. Use the $250 a month because it is what you currently are contributing.

3. Yes. You will have to show receipts for the overage to prove your expense. It shouldn't be a problem.

Since you have already paid him and he has done the paperwork, he might not give you any money back. He will justify his $1500 as an hourly rate to get your paperwork completed and he may say that you owe him more. But it is worth a shot.

Good luck.

[coopersmydog]

Can you provide me the section in BK code or case law that supports #1. If what you're saying is true, my attorney is an idiot and I absolutely have to file by tomorrow. I need to be able to take him some documentation to show him what's up. He's the one that told me it would count in Feb., and I was under the impression it was in March.

[optimistic1]

my attorney is an idiot

Even with all the education, there are many like this for sure, let us hope mine is not like this come filing season.

[EricaCallaha]

I don't have the code or case law (sorry). It is what our attorney told us. It is also common accounting practice. The IRS considers this income to be March so I don't see how the code could consider it to be February. Just like if you received the bonus in January but the period ended in December, the IRS doesn't count it for December...it counts it for January because you didn't RECEIVE it until January.

Good luck.

[jandrl2001]

We had the same question in our filing, we had to wait a certain time to pass means test for 7. Yes it will count as income from the day you received it, doens't matter if it is from the last payperiod. If you look back previous months paystubs you are already counting some income probaby from early feb that was in a january payperiod, hope this helps!

[coopersmydog]

In this case, if it counts as March income, it won't figure into my income. If it counts as feb. it will. I'm searching all over the internet and I can't find anything definite. If anyone can point me to some case law or something I can show the attorney, that would be great.

[lrprn]

1. It's when you received the money that matters for the Means Test income calculation, not when you earned it. Score 1 for lawyer - he's right about this.

2. If the HSA expense has only been paid for 3 of the six months prior to filing, when filing Ch 7 you get to count $750 divided by six months = $125. Score 2 for lawyer - he's right about this too.

3. The Means Test mandates use of the utility figure for your area. However, you real expenses can be added as exceptions on Schedule J. Whether your court takes the figures on the Means Test or the Schedules to show if there's disposable income or not depends on prior case law or court customs in your local court and/or district. Since your lawyer appears to know what's going on in your local court, I'd give him the benefit of the doubt and say he's right about this too. Score at least 0.5 for the lawyer here as well.

I wouldn't be so anxious to get rid of this lawyer just because you don't like what he tells you. Given the little info you've shared here, he seems pretty on the ball to me.

[EricaCallaha]

Cooper....

In the 13 thread, you said your lawyer wants to count this bonus as February. Put it back into his court as to why he says that it is February and not March. As far as the IRS is concerned...it is March because you did not RECEIVE it until March. (Sorry lrprn, the lawyer is wrong about this and he gets 0 points.)

Are you filing 7 or 13? We changed the amount in our HSA 2 months prior to filing to receive the employer match and we got to claim the higher amount. Could be the difference in a 13 and 7. We filed Chapter 13.

Good luck.

[lrprn]

Cooper....In the 13 thread, you said your lawyer wants to count this bonus as February. Put it back into his court as to why he says that it is February and not March. As far as the IRS is concerned...it is March because you did not RECEIVE it until March. (Sorry lrprn, the lawyer is wrong about this and he gets 0 points.)

Since Coop didn't specify which position he took in his duplicate thread, I assumed wrongly that it was the lawyer's position the income would count in March. Faulty assumption on my part...mea culpa. I didn't see Coop's duplicate thread until now, so I combined both threads here. Now all the pertinent info is finally all in one place.

Coop, it's against our forum rules to post the same question in two different threads. Now you see why this rule exists. In the future please don't post duplicate threads - thanks.

Are you filing 7 or 13? We changed the amount in our HSA 2 months prior to filing to receive the employer match and we got to claim the higher amount. Could be the difference in a 13 and 7. We filed Chapter 13.

It is the difference between Ch 7 and 13. 13 uses *ongoing* expenses at the time of filing, and Ch 7 typically uses *actual* expenses over the last six months before filing.

Of course given the wide variances between bk courts, only someone well-versed with Coop's court practices can answer this particular question with certainty. But in most courts when filin Ch 7, this expense would be halved if he files Ch 7 in March.

[lrprn]

In this case, if it counts as March income, it won't figure into my income. If it counts as feb. it will. I'm searching all over the internet and I can't find anything definite. If anyone can point me to some case law or something I can show the attorney, that would be great.

Here's how the Ch 7 B22A form Part II Line 2 defines income - "All figures must reflect average monthly income received from all sources, derived during the six calendar months prior to filing the bankruptcy case, ending on the last day of the month before the filing. If the amount of monthly income varied during the six months, you must divide the six-month total by six, and enter the result on the appropriate line." http://www.uscourts.gov/rules/BK_For..._022A_1208.pdf

Here's a 2008 Wisconsin case law decision in a Ch 13 case that stated that any income including bonus income received within the 6 month pre-filing did have to be included in total when calculating income - http://74.125.93.104/search?q=cache:...&ct=clnk&gl=us . This would seem to support that when you receive the bonus is what matters, not when you earned it.

This 2007 bk law blog post also appears to confirm it's when you receive the bonus that matters - http://www.************************/...ked-it-part-1/

Don't know if this provides the kind of 'proof' you were looking for - hope it's a start.

[justbroke]

I concur with lrprn on the "counts when received" versus "counts when earned". That's standard accounting practice for what they call cash-based accounting... which is what 99.99% of we individuals use. (Only some strange companies use the accrual method, which is you count it when it's earned, not received.)

[TooMuchCredit]

If you haven't filed yet I don't think it matters when you received that bonus as the 6 month window assuming you file tomorrow would be October 1 thru March 31.

As far as the expenses, I have been under the impression that income is averaged over 6 months but your expenses are your current expenses. I upper my 401k in december to 5% and should be able to claim that as my current expense.

[BigJohn]

In this case, if it counts as March income, it won't figure into my income. If it counts as feb. it will. I'm searching all over the internet and I can't find anything definite. If anyone can point me to some case law or something I can show the attorney, that would be great.

Your original question was "1. If I receive a bonus payment on March 6th, but the pay stub says it was for the pay period ending February 25th, does that count as Feb or March income for the means test?"



What is the date on the check?