Income question

[limage]

Since I am a mortgage banker, my income varies from month to month. Sometimes nothing (like most of last year!) and sometimes good, sometimes ok. My last few paychecks have been good ones, but even with 6 months average I am still pass the means test.

Will the trustee question my recent increase? Will I be able to explain my income? I am so worried about being forced into a ch 13- I don't even know how they can determine disposable income when I never know what it will be month to month.

[JRScott]

They can take into account totality of situation, however with variable income which I assume you can prove going back a couple years you probably are safe. Certainly a situation to bring up to any lawyers you seek consultations with.

I think you'll be fine though.

[kathy4530050]

Since I am a mortgage banker, my income varies from month to month. Sometimes nothing (like most of last year!) and sometimes good, sometimes ok. My last few paychecks have been good ones, but even with 6 months average I am still pass the means test.

Will the trustee question my recent increase? Will I be able to explain my income? I am so worried about being forced into a ch 13- I don't even know how they can determine disposable income when I never know what it will be month to month.

I'm self-employed and have the very same situation. My lawyer is asking me to provide 6 months of detailed P&L statements in addition to the two tax returns. He doesn't see a problem. I came into a pretty sizeable chunk of income in February and now am hard at work spending it on business expenses to reduce my net. It's that or wait 6 months for it to drop off. I'd rather just save it and live carefully--never know what the coming months will bring--but I have been advised to spend and file, the sooner the better.

If I still come in over the median or even don't pass the means test, my lawyer will argue that this spurt of income was unusual and in no way represents the way money usually comes into my business. I'm sure yours could do the same.

Best of luck.

[limage]

The hardest part of this is because I have had a few good months, I need to stash some away for bad times and I can't do this with my filing coming up. I am stocking up and overpaying some of my utilities to help. Plus I got my tax return that I need to spend.

[kathy4530050]

The hardest part of this is because I have had a few good months, I need to stash some away for bad times and I can't do this with my filing coming up. I am stocking up and overpaying some of my utilities to help. Plus I got my tax return that I need to spend.

I did some stocking up too, but came to understand that I have two issues here: protecting the income that has come in, and reducing my net. Stocking up reduces the $$ in the bank, but doesn't reduce my net, hence the extra business spending.

I posted something here about wanting to keep a bit of a cushion somewhere so that I wouldn't find myself on the first of some month with $0 in the bank. However, someone on the forum wrote back to me and said that you can't simultaneously keep a cushion and file for bk--it's one or the other. And, as this person pointed out to me, being debt-free is its own kind of safety net. So, even though it makes me really nervous--I'm spending. Good luck!

[JRScott]

Depending on your state you might look into stocking the pantry, some have generous allowances for food etc.

Car repairs might be a good idea.

Dental or Eye appointments if its been a while.