Increased income before and after 341 meeting?

[PaKettle]

Hi, I have chosen an attorney and am assured I qualify for Ch. 7 but I have not retained the attorney yet due to lack of funds. So I still have some questions for you folks...

My problem is that my job is somewhat seasonal, my income goes up and down. I can clearly show that my income this year is much less than my income last year and we are well under the Means Test qualifications and I think we will be even if I get more work over the next few months after I file.

However, I have been working 3 and 4 days a week, for the past few months, and now there is a chance I will start to get 5 days in October, Nov and December, bringing up my income about 20%. As I said, I am pretty sure if this happens we will still be under the means test income requirement; but we MAY temporarily have some disposable income.

But if I can show that this rise in income is almost certain to be temporary, that it will very likely go down again in Feb thru Aug., will they consider that? I can show this through the past couple of years' paychecks.

I assume that as long as we would still be under the means test and have little or no disposable income, we will still qualify for Ch. 7? However, for those few months of Nov, Dec and Jan when I get more days of work, if you averaged THOSE out, it would look like I make more than I really do.

I am going to try to tell my employer to keep me at 4 days a week until January but if they need me to work more I may have to, to save my job for the future. They don't like it when workers are "unavailable" (even one day a week) when they need them. It's like they want to totally control your days and hours, as they please and they want you to have no say in it. You "take it" when they give you less and you take it when they give you more...

[lrprn]

My problem is that my job is somewhat seasonal, my income goes up and down. ... But if I can show that this rise in income is almost certain to be temporary, that it will very likely go down again in Feb thru Aug., will they consider that?

If "they" means the bankruptcy court, then no, fluctuations in income don't matter in the black and white world of bankruptcy after Oct 2005. All that counts what you make in the six full calendar months before you file.

Do try to plan ahead to see when the optimal time to file will be to stay under the median. If you have to take the extra days and they push you over the median, you may have to wait to file until your income goes down again.

Would your lawyer consider a payment plan so you can file now?

[PaKettle]

If "they" means the bankruptcy court, then no, fluctuations in income don't matter in the black and white world of bankruptcy after Oct 2005. All that counts what you make in the six full calendar months before you file.

Do try to plan ahead to see when the optimal time to file will be to stay under the median. If you have to take the extra days and they push you over the median, you may have to wait to file until your income goes down again.

Would your lawyer consider a payment plan so you can file now?

Thanks for your answer.

Not to argue - you seem very knowledgeable - but can that really be true? I thought I had read somewhere that if your income goes up after filing, you have to report that, and that it can screw things up... But you are saying that it ONLY can screw things up IF it puts us (my wife and I) over the median income per the guidelines for our state? I thought it also had to do with disposable income vs expenses....?

If the only thing that counts is the 6 months before we file, then we will be fine, and I can take the extra days at work if they are offered, after we file... I thought I'd have to wait til after the 341 meeting before I could accept any extra days at work.

If what you say is true, it seems crazy. So, theoretically, I could file because I made let's say $5k under the median for my state the 6 months before the bankruptcy. Then after that, leading up to the 341 meeting, I could get a job making twice as much money, and they'd still discharge my debt?? I would think the creditors might have a legitimate objection in that case... But you are saying no? Or am I misunderstanding?

[lrprn]

Not to argue - you seem very knowledgeable - but can that really be true?

If you are filing Ch 7, then IF you income increases after you file, and IF that increase is reflected on your paycheck BEFORE your 341 meeting and IF your trustee asks during the meeting if your income has changed since you filed, THEN the increase may impact your case.

Current legal thought is that if you have an increase in income after your case is discharged, you are completely in the clear. Most lawyers have the opinion that if you get an increase in income after your 341 meeting but before discharge, that's ok too. Ch 7 is very different than Ch 13 in this respect.

Since you're concerned, please be sure to ask your lawyer about how increases in income and when they happen between filing and closing are treated in your court by the trustees.

[cathywhite4495]

Since you take your avergae income for the 6 months preceding your filing, the extra days might not make such a big impact. I had a bonus and an extra check from a temporary job in my average and it did raise my average monthly income higher than it really is (still well under the median). I originally did my schedules based on the money I spend normally which showed disposable income. After getting advice from people on the forum, I amended my schedules to show how much I would spend on food etc if I wasn't scraping money up to pay the creditors. Check out the IRS allowances for a family of your size to see if you could spend more on food, clothes etc. Also, don't forget to average in expenses that you pay periodically. For instance, on my clothes budget I initially forgot to average in winter coats, boots, hats.

[freshstart06]

you know to be safe don't do anything until after the 341 meeting. Chpt 7 is too important and necessary for you right now to make a mistake. Just wait until after. Heck, wait until at least a month after the 341.

[PaKettle]

you know to be safe don't do anything until after the 341 meeting. Chpt 7 is too important and necessary for you right now to make a mistake. Just wait until after. Heck, wait until at least a month after the 341.

Well, the reason I was asking is that I may not have a lot of choice, or that is, I may jeapordize getting more hours at my job, in the future, if I say I can't take more hours, say, in October and November when they need me more.. which would be after I file but before the 341...

However, I am pretty sure it would still keep us under the median, even if I accept a few more days of work, so it sounds like it shouldn't be a problem. I'll definitely ask my attorney about this as soon as I retain him officially.