Scared to death!

[Markovian]

I am an above-median debtor ($55,000 income / Median $48,000), and recently filed an emergency petition for Ch 7 Bankruptcy (Pro Se). I have a normal full time job, but also hold a Real Estate license on the side. Last year, I, like others, did not do so well, but I did manage one sale - resulting in a $3,200 commission. However, in such a small business, my expenses are incurred throughout the year. I earned this commission in October, but the bulk of my expenses that were incurred to earn this money (Lots of mileage, Fees, memberships, Education, Licensing, etc.) are paid in the beginning of the year. Thus, within my 6 month income window, I have this rather large commission, but virtually no expenses within the same period to offset it. Of course, when you file taxes, the whole year of profit/loss is taken into account, and my net income from the activity will be zero. However, it appears that this is going to add $500 a month to my income, and even the mileage doesn't appear to be a valid expense, since the note on the B22a reads that no expenses can be duplicated. I assume, even if seemingly unreasonable, that the Trustee will object to mileage since car operating expense is already allowed.

So, if all of this is true (And hopefully some of you seasoned folks can give me an idea), my fear is that the Trustee will force me to convert to a Chapter 13. While I am not opposed to a Ch 13, I would want to file later so that my income is not artifically inflated. I have no non-exempt assets for the trustee to take, so is it possible that I am freaking out for nothing? At this point, I am tempted to withdraw my Ch7 petition, wait 3 months, and file a Ch13 (And hope I am not sued by CC companies in the interim - I stopped paying in Nov 08). Please help!

[JRScott]

Even if you pay the fees only once a year for your real estate, I'd pro rate the expense over the year. For example I only get my kerosene tank filled once a year. For my expense sheet though we divided that amount by 12 and used that as a monthly expense. Since you filed pro se might be a little harder to make the case but if you have receipts and proof it is a recurring yearly expense I don't think it will be a problem.

[jribe]

Can you wait a few months to file so your income will drop? It seems that many have gone many months without paying their bills before even getting anything about a judgement. And that process will take a couple months as well. We're waiting until May to file so some income will drop off that we no longer have..

If you've already filed, and they try to put you in a 13- i believe you can decline. Then wait a couple of months to re-file for a 7
Good luck!

I am an above-median debtor ($55,000 income / Median $48,000), and recently filed an emergency petition for Ch 7 Bankruptcy (Pro Se). I have a normal full time job, but also hold a Real Estate license on the side. Last year, I, like others, did not do so well, but I did manage one sale - resulting in a $3,200 commission. However, in such a small business, my expenses are incurred throughout the year. I earned this commission in October, but the bulk of my expenses that were incurred to earn this money (Lots of mileage, Fees, memberships, Education, Licensing, etc.) are paid in the beginning of the year. Thus, within my 6 month income window, I have this rather large commission, but virtually no expenses within the same period to offset it. Of course, when you file taxes, the whole year of profit/loss is taken into account, and my net income from the activity will be zero. However, it appears that this is going to add $500 a month to my income, and even the mileage doesn't appear to be a valid expense, since the note on the B22a reads that no expenses can be duplicated. I assume, even if seemingly unreasonable, that the Trustee will object to mileage since car operating expense is already allowed.

So, if all of this is true (And hopefully some of you seasoned folks can give me an idea), my fear is that the Trustee will force me to convert to a Chapter 13. While I am not opposed to a Ch 13, I would want to file later so that my income is not artifically inflated. I have no non-exempt assets for the trustee to take, so is it possible that I am freaking out for nothing? At this point, I am tempted to withdraw my Ch7 petition, wait 3 months, and file a Ch13 (And hope I am not sued by CC companies in the interim - I stopped paying in Nov 08). Please help!

[B65]

I am a realtor

and I had one comission and they used it as income for the 6 months they added $600 a month even though that $3900 was the only earning in 12 months. They did not take into account what i have to pay, that went on schedule J.
if i were you I would wait for it to drop off my 6 months.

Good luck...

B

[Markovian]

Thank you for all of the replies. Because I recently received a raise in my full time job, my income will probably rise to a point where I can no longer pass the means test, which is why I filed when I did. If I divide my expenses by 12 as one poster said, I may be able to come out ok. To the Realtor - did they object to your standard mileage expense? That can be quite sizeable at .50 per mile. Also, if I need to withdraw, would I be better off filing a motion or letting the court dismiss it (For not submitting the remainder of my schedules, for instance)? Thank you again for all of your assistance!