How is variable income treated?

[furr2ball]

[LadyInTheRed]

Your last six month's income will be averaged to determine your monthly income.

[holycrap]

Your last six month's income will be averaged to determine your monthly income.

And NO CONSIDERATION will be given to your incomes fluxuations. Your payment will be what it is. This is what is keeping us from filing.

You can petition for an adjustment, but not until you can prove your income has changed and that may take time. You may also have to pay your attorney more each time you try and have it adjusted.

[HHM]

Well, it can be tough, but a number must be reached somehow. In more stable times, you can average your income over 1 or 2 years (but my guess is, your income was probably higher 2 years ago than it is now). Sometimes, if you can show a predictable pattern of increase and decrease, you can do tiered payments (e.g. Jan-April $600 per month, but Oct-Dec, $400 per month). But, the idea of a chapter 13 is to create predictability in the plan. So, you will need to have extra discipline to SAVE during the good months to make it through the lean months.

From a practical standpoint, is the home worth saving and even if it is worth saving, can you afford it. Ask yourself this, if you DID NOT get a modification, could you afford the home? If the answer is no, then forget, let it go. But for trying to keep the house, could you qualify for chapter 7?

[furr2ball]

[LadyInTheRed]

will I be able to keep large sums in savings for future payments and unforeseen expenses?

After you file, yes. But, if you have balances on the date of filing that you can't exempt under your state's bankruptcy exemptions, the amount paid to unsecured creditors during the life of your plan must equal or exceed the non-exempt cash (and any other non-exempt assets).

[furr2ball]

After you file, yes. But, if you have balances on the date of filing that you can't exempt under your state's bankruptcy exemptions, the amount paid to unsecured creditors during the life of your plan must equal or exceed the non-exempt cash (and any other non-exempt assets).

I must be a little thick today I do not follow, could you please give me an example or direct me to a guideline for referance. Thank you

[lrprn]

I must be a little thick today I do not follow, could you please give me an example or direct me to a guideline for referance. Thank you

When you file bankruptcy, how much cash you can have on hand on filing day depends on how much cash can be protected by the bk exemptions in the state you file in. Some states allow more cash to be on hand than others. You need to ask your attorney what to expect when you file so you can plan ahead. In our case, our state has no exemptions that protect cash, so our lawyer advised us to have less than $250 in our accounts on filing day.

However, after you file it's a different story. That's when you can save all the extra money you make on the higher income months to carry you over during your leaner months. After your confirmation, how much cash is in your savings and/or checking accounts doesn't matter except in very unusual situations (like winning the lottery ).

[LadyInTheRed]

When you file bankruptcy, how much cash you can have on hand on filing day depends on the bk exemptions in the state you file in. Some states allow more cash than others. You need to ask your attorney what to expect when you file.

However, after you file it's a different story. That's when you can save all the extra money you make on the higher income months to carry you over during your leaner months. After your confirmation, how much cash is in your savings and/or checking accounts doesn't matter very much.

LOL, that is a much shorter explanation than I finished typing before getting an email saying there was another reply to this thread. My many words don't add anything. Your good, lrprn!

[Bkman2]

I'm in the same boat. I filed and my wife didn't. They looked at our average income over the last 6 months and can up with a number for my plan. At the 341 meeting the trustee asked for 2 more months of my profit and loss statements. My attorney said the trustee was checking to see if he could get more money out of me and they may ask for more P & L statements in the future. I was told that if they ask for more money my attorney will try and do a payment step up to put off the trustee and then if I have another 4 to 6 months of low income they will convert me over to a chapter 7. House is not in plan so a 7 is a better deal with my income, or lack of it.