6 month look back

[B12]

What does "6 month look back" mean? I keep seeing the term but in searching cannot find any info.

[arkienurse]

What does "6 month look back" mean? I keep seeing the term but in searching cannot find any info.

It means that the trustee "looks back" at your income for the past 6 months. Like if you have a bonus or something that inflates your income, many will wait until it is past the 6 month period before they file. Or if you have a decrease in income, hold on for the 6 months, so it reflects your new salary, other wise it will look like you make more than you actually do.

Does this help?

[lrprn]

Arkienurse explained it well. In order to calculate your total income, the Means Test "looks back" for the last six full calendar months before filing. Any money that you earn or receive during this time - salary, bonuses, refunds, gifts, etc - gets added in. Also included are any assets (stocks, 401K loans, etc) you've converted to cash - this is why understanding exactly what impact any financial decisions made for the six months before filing is so important).

Frankly this forced six months past income calculation was part of the current bk law's drafters' attempt to force more people into Ch 13 to pay back their debts. It's particularly unfair to folks who are self-employed, work on commission, or who have irregular or seasonal work. You can easily get stuck in situations where it looks like you make much more money (or much less money) than you actually do.

[B12]

Between a rock and a hard place. Any advice???

I am having a hard time deciding when to file and will probably have to decide between the lesser of two evils.

Have a small business and looking back from today, my income is nominal. But, I have a 10,000 balance transfer rate check deposited into my checking account that took place in July.
I have made 3 payments so far.

So, I was trying to wait and pay more on the account.

Here is the problem. The holiday season is coming and this time is the bulk of my sales. On top of that, the business is doing so much better than it has done over the past 4 years and will become a money maker, FINALLY, next year. Not enough to ever pay off my cc debt, but enough to garner a decent income.

If I file now, and the creditor objects, I have no problem with having to pay off the transfer since I am trying to Chap 7 over 90,000. in debt, a 180,000 first mortgage and a HELOC of 75,000 I will gladly pay off the 10,000 if it comes to that. Am I right in thinking that the creditor objecting is the only problem I would face with this transaction???

But, even with the increased income over the next few months, I am still way under the state median.

Sorry for the length and complication of this. Any advice or am I missing something else?

I want to understand it even before I meet with the lawyer.

[lrprn]

If I file now, and the creditor objects, I have no problem with having to pay off the transfer since I am trying to Chap 7 over 90,000. in debt, a 180,000 first mortgage and a HELOC of 75,000 I will gladly pay off the 10,000 if it comes to that. Am I right in thinking that the creditor objecting is the only problem I would face with this transaction???

Given what you've shared with us, the creditor objecting to the balance transfer looks to be the one potential bad outcome of filing now.

Since you say you don't mind paying the $10K back and you've already made three payments toward the debt, then I'd say it's worth the risk the creditor might object to file now. As you say, it's 10K possibly paid back vs multiK of relief - no contest in my mind.

Ask the lawyer you're meeting with what he/she thinks about your situation. They will be more familiar with your entire financial picture plus may have some experience with how this one creditor is likely to react.

[CindyLou]

Yes, think about it. Paying the 10,000 vs. potential going into a 13 and paying the 90,000 back up to 100% depending on your income!! Personally, I would gamble the 10,000. Plus if you took it in July, then you are almost at the 90 days anyway and the chances of objections are low. Really, how many posters on here have actaully had objections because of balance transfers or cash advances??? We talk about it alot ,but really don't have many people say that have had objections, right??? We are in septmeber now....you took it in July, right? What does you attorney say about filing now and then just taking the chance on the 10,000? If you have to go into a 13 I would venture to say that you would end up paying back more than 10,000 anyway. Now, remember this is just my opinion.....

[sydneynoel]

I would wait 90 days since you cashed that balance transfer check and then file. In the meantime keep making the monthly payments like you mentioned you were doing. That's exactly what I'm doing. I deposited a balance transfer check for $900 into my checking acct. too (last month). I did this to help pay rent, make a car payment and buy food. All in which are important living expenses and if questioned I can back up what I did with the money. I'm also making the min. monthly payment on the card until the month I file. Good luck to you and don't worry. Like I said, you should file after waiting 90 days. I wouldn't wait until after the holiday season since your income is going to be going up.

[CindyLou]

I missed the fact that you said you will still be under the median in the next few months. Talk to your lawyer, but it looks like you will get the best of both worlds.....you will get to wait the 90 days and STILL be under the median!! You will feel more at ease once you meet with your lawyer. I don't think the 10,000 will be an issue once the 90 days passes.

[Boscoe]

If this balance transfer took place in July, then wait the 90 days until October and file then. Make one more payment on this (that will make 4) and then file.

I give it less than 50-50 that the creditor will object. I took $25k out 6 months before I filed and no objection so far. I have been told by others in this forum that if they don't object by the 341 meeting, it is even further unlikely they will in the last 30 days prior to the objection deadline.

So, wait the 90 days, and file next month.....