Nervous about Median and Means test due to unusually high 6 month income

[riff]

Hi

I am new to the group. I am going to file this week, but after filling out the forms to give to the attorney I am a bit worried.

State median income $67,103 three person household.

Income 2008 $60,000 from taxes
Income last 6 months Feb to July
Myself $3162 /mo severance (laid off Jan 31, 2009)
Worked for few months on a 100% commission job and made $5100 total gross. Rehired with former employer at same pay starting last month July making about $3162 gross month
Spouse makes $2167 gross/month

To pass median test 6 month income must be under $33,552

Our 6 month income is $38,528.48. This is unusually high since I was getting severance and working at the same time. Our income from now on will average slightly over $63,000. 6 month income would be $31,500.

I figured our expenses will qualify us for Chapter 7 with our income. I am afraid that we will be put into a Chapter 13. We briefly discussed our situation with our lawyer a month ago but didn't know the total income and expense scenario.

My question is do they look at current/future income if the past 6 months is usually high? Also, what about those who get a pay cut and now have to file bankruptcy because income is too low to cover payments? Their 6 month income is higher but future income would qualify them for Chapter 7. Is the court flexible in these situations?

Any thoughts would be greatly appreciated.

[OhioFiler]

The means test is only a test for the "presumption of abuse". The ultimate deciding factors are on your Schedules I and J.

[lrprn]

Since your inflated last-six-months income is close to your state's median income for your family size, if your lawyer plugs in the figures in your Means Test and Schedules and it shows enough disposable income to push you into a 13, then you'll need to wait until the six month lookback reflects a less inflated amount of income to ensure you can file Ch 7.

If the lawyer plugs in your inflated income figures and you still come out with insufficient disposable income to support a Ch 13 plan, then go ahead and file your Ch 7 now.

[aces67]

Our lawyer did just as LRPRN is suggesting. We tried to convert to a 7 in January but when our lawyer plugged in all our numbers we had disposable income leftover.

However when he tried again in April we were below the median and had negative income leftover.

[riff]

When I talked to the lawyer last month, he said I should stop making payments to the credit cards since we were planning on filing this month. Now that things may be delayed, should I keep making payments?

[aces67]

No as long as you've decided to file you should stop paying. You may get some collection calls while your waiting to file but it will be okay.

[riff]

Another question comes up. I have checking and savings with the ame company that I have credit cards with. If my bankruptcy filing needs to be delayed, should I open accounts elsewhere so they don't pull money out on me?

[whipster1]

Yes.