In a Chapter 13 bk.......Income Question

[GettingGoing]

What income is used to determine the amount of payback? Is it income over the 6 months prior to filing? It it income at time of filing? The reason I ask is because I want to file bk now and I believe I will be forced to file ch13 because we are in a workout plan with our mortgage company. I am currently working ft and my wife is job hunting. If we file now and my wife finds a job in a month then how does that work?

[lrprn]

What income is used to determine the amount of payback? Is it income over the 6 months prior to filing? It it income at time of filing?

Your gross income from all sources from the last six full calendar months before your filing date is what is used to calculate your income for the Means Test and Schedules. Some income (Social Security, for example) is not counted into the total, but just about everything else is.

If we file now and my wife finds a job in a month then how does that work?

How your Ch 13 plan could be affected depends on how much of an income increase your wife gets over what was calculated for filing. However, keep in mind that her expenses could increase with a new job as well, so the impact could be less than you think.

To complicate things, Ch 13 trustees vary widely across the country in how they handle income increases after filing. Some want to be notified about any increase, some only want to know if the increase is over 10% of your filing income, and a few don't care and don't want to be notified at all.

I can say that most lawyers will recommend that if possible, your wife should avoid getting her first paycheck at a new job between filing and the 341 meeting.

Bottom line is there's no black and white answer for what would happen after filing a Ch 13 if your income as a couple increases. It depends on too many factors to hazard a guess in your unique situation.

[GettingGoing]

Your gross income from all sources from the last six full calendar months before your filing date is what is used to calculate your income for the Means Test and Schedules. Some income (Social Security, for example) is not counted into the total, but just about everything else is.

How your Ch 13 plan could be affected depends on how much of an income increase your wife gets over what was calculated for filing. However, keep in mind that her expenses could increase with a new job as well, so the impact could be less than you think.

To complicate things, Ch 13 trustees vary widely across the country in how they handle income increases after filing. Some want to be notified about any increase, some only want to know if the increase is over 10% of your filing income, and a few don't care and don't want to be notified at all.

I can say that most lawyers will recommend that if possible, your wife should avoid getting her first paycheck at a new job between filing and the 341 meeting.

Bottom line is there's no black and white answer for what would happen after filing a Ch 13 if your income as a couple increases. It depends on too many factors to hazard a guess in your unique situation.

Great information. It would be a dramatic increase in our income if she gets a job. Thanks again for your answer. Would you happen to know anything about filing for ch7 while in an in-house modification? I cant find a good answer concerning this.

[lrprn]

Would you happen to know anything about filing for ch7 while in an in-house modification? I cant find a good answer concerning this.

I suggest you head over the Ch 7 forum area and post this question. Try a search first - it's been discussed there before.

(And btw, your answer depends on whether you intend to keep the house after filing Ch 7 or surrender it )

[GettingGoing]

I suggest you head over the Ch 7 forum area and post this question. Try a search first - it's been discussed there before.

(And btw, your answer depends on whether you intend to keep the house after filing Ch 7 or surrender it )

Thanks, I did post the question in the ch7 forum however so far no one seems to know the answer to the question. BTW keeping the home post bk is a must.

[lrprn]

Thanks, I did post the question in the ch7 forum however so far no one seems to know the answer to the question. BTW keeping the home post bk is a must.

If you want to keep the house after filing, then to file Ch 7 and keep the house, your mortgage payments MUST be up to date on filing day.

Also if you are near your state's median income, a higher mortgage payment could make the difference pulling you below the median and enabling you to file Ch 7.

However, if after the Ch 7 is discharged successfully but you can't make your mortgage payment if it doesn't come down, then it's best to consider filing after the refinance efforts are completed to lower the payment you will be left with after filing.

When the best time to file in your individual circumstances is something you can ask the bk lawyers during your free initial interviews.

The answer about when to file in your situatino is going to depend on several factors. You need real legal advice to sort out your options and what consequences will result with different filing timings that may impact keeping your home.