How is income calculated?

[waitinggame]

I have been told they calculate income on a 60 day basis? I also have read they go back 6 months? They don't calculate income based on what you filed on yearly tax forms? Also, if there is 5 weeks in a month, and you get that extra pay, is that figured into it, and should you wait until it doesn't factor?

Thanks all for the help!~

[HHM]

Means test = 6 month look back. The means test is only used to determine if your qualify for a chapter 7 or chapter 13. And yes, it is ALL pay, during the look back period.

The code doesn't specify this, but generally, you will take the average of the previous 60 days of income for purposes of schedules I & J (income and expenses), and those schedules is where your chapter 13 payment usually comes from. However, you will get an objection from the US Trustee if the disposable income on the means test is higher than schedules I & J.

[waitinggame]

Thanks for answering so quickly,

I didn't have a problem with the means test. I didn't qualify for a Chapter 7, however, but according to "allowed" expenses, my payment would be around 300-400 a month.

With the Schedule I & J, according to my lawyer, I will be paying around $1400 a month - because of overtime recently, and the 5 week pay within the 60 days.

My problem, I don't know if I can wait until later to file, and if I do, will the Trustee consider that some sort of fraud? I am about 7 to 8 months without paying bills.

Thanks again,

[HHM]

Generally speaking, there is no reason schedule I&J should be higher than Form B22C (means test). The same income numbers are used. This doesn't sound like an income issue, heck, on schedule I&J, you can calculate that income based on JUST YOUR LAST paycheck.

Are your expenses in I&J lower than the standards. If so, in many districts, you can still use the standards on I&J even if you don't actually spend that.

[waitinggame]

Yes, the expenses are alot lower then the means test. I can't really justify spending due to the fact that I pay most things with cash. My attorney has not allowed any lead way either. She has said that the Trustee will question any monies toward - entertainment, household repairs, etc.

She is telling me that I will need receipts for anything in those items. We are expecting expences - dental work, old applicances, 60+ year old house, etc. I live in PA... do you know if that sounds correct? If I could allow those expenses (forseeable expenses) then I would be okay. If I have to account for all of my spending, I am SOL. She also said, no entertainment at all!

[HHM]

Well, I can't really speak to the customs and standards in your district, either, you have a very conservative lawyer or a very strict district. But there is NO reason there should be a $1,000 difference between disposable income between the two forms.

Your attorney may be forgetting one of the basic elements of evidence; uncontroverted testimony. The trustee can object to expenses all he wants, if you go to hearing, your evidence is your testimony, what evidence does the trustee have that you don't spend the money. zilch.

I usually hate to say this, but with that difference in Disposable income, and your attorney saying there is no other option, you may need to shop some other attorneys.