How does husband's commission figure into plan?

[jmms23]

Hi there!

I'm new here, but I had a quick question about my husband's commissions. He gets a base salary of $24,000.00 but his commissions per month vary anywhere from $0.00 to $4,000.00. And we never know what the commission check will be until 1 month before the check is disbursed.

This is a major reason we fell behind on things, and we are certain that a Ch. 13 and some strict budgeting will get us caught up and on track, but I am wondering how this income is used in formulating a Ch. 13 plan.

Any advice and suggestions are greatly appreciated.

Thanks!

Jeannie

[SMinGA]

Perhaps an average of the past 6 or 12 months? That is my best guess - your attorney will probably know how your district/trustee handles variable income though.

[justbroke]

Exactly. You take an average of what was paid. Generally speaking, most District use the "disposable monthly income" (DMI) figure that is calculated by the Means Test (Form B22C) as the disposable income. That DMI already includes your average monthly income during the "look back" period.

If you are below the median, then the DMI will come from your Schedule J and it may be a little more work to get to the right number. Just to mention... bonuses absolutely count. Some Trustee will do some "test" cases where they'll take your total income from your last reporting tax year and divide that by 12. That will help them "see" if you are underreporting your income. For example, some people, like myself, get annual bonuses while my commissions are paid monthly. If you time your filings, you could be able to show your "look back" income without the bonus! They look specifically for that "problem".