Cashing in vacation for pay

[signal]

2 weeks ago i cashed out 7 days of vacation at my job so that I could give my wife money for our failing business. So she could pay bills.

Since for means scoring they go back 6 months, this will show up as 1700.00 addtional pay for one check. Over 6 months thats like an extra 283.00 a month in pay. Normally you just take the days off, go somewhere nice, have fun with your family and relax. But when things are so bad in finances you cant sleep at night, you cash vacation in to try to hold things together. Now I am worried I have hurt myself when they look back at 6 months pay. I suppose I could wait 5 months to file so it "rolls off" my score, but its possible in 2010 I could get bonuses or even a raise. In 2009 I got neither, as it was a tough year for where I work. is there anyway to deal with something like that, income that is not really normal income, that you got from cashing in vacation, and handed directly to your small business?

[backtoschool]

It will be considered income. The only way to deal with it is to wait for it to fall off of your six month look back period.

[OhioFiler]

This situation affects your means test but probably could be excluded on your Schedule I of current income given your explanation. Do you typically cash out your vacation earnings or do you usually take the time off?

[signal]

I take time off, but have been using my vacation as a cash account because I have no money. So when my car breaks, and your living on very little available money each month, I will cash in vacation.

Other things I do which seem to hurt me a little, is I contribute 10% of my pay to 401k, and I am going to drop that, so I end up paying more taxes.

[AngelinaCatHub]

It may be income but it is a one time "gift" so to speak. It is explainable and if you offset the income with exempt spending like bills, I doubt it would hurt you with the Trustee. It's been so long but I believe in our paperwork there were places for comments. I would chance it. 'Hub

[backtoschool]

I take time off, but have been using my vacation as a cash account because I have no money. So when my car breaks, and your living on very little available money each month, I will cash in vacation.

Other things I do which seem to hurt me a little, is I contribute 10% of my pay to 401k, and I am going to drop that, so I end up paying more taxes.

How long are you giving yourself to get your income down to a Chapter 7 level? Your 401k is an fully exempt asset and putting money in there is a very good way to protect 10% of your income in a bankruptcy.

The small boost to your expenses you would get by eliminating the contribution would not make up for the fact that 100% of the cash you put into the 401k is fully exempt and can't be touched by the trustee.

[LimpDisc]

I did the same thing with vacation pay. The only difference is that I did it over a 3 month period. My attorney said it's income and I need for it to drop off. I need to wait until December to file because I cashed it out in March, April and May.

[backtoschool]

I had to count my cashed out vacation pay that I got with my last paycheck when I got laid off as income on my schedules. Since I was a workaholic and never took vacation so I had a lot of cashed out vacation days in my last paycheck, it was one more reason to wait six months before filing.