Temporarily Making Less $

[AlmostAmos]

My situation:

I am currently paid an hourly wage that would make my annual gross income approximately $125k if I were to work 40hrs/week. The median income for a family of 5, in my state, is about ($92k annually).

My wife is pregnant & has been having problems that have required that I be at home quite a bit (taking care of her & our children). I've been taking unpaid family medical leave for this time. This will continue until June/July, possibly longer. Because of this, my 6-month income will easily be under the median income level (I'm estimating around $42-43k 6-month average).

As I've posted in my other threads, we're in WAY deep and bankruptcy is the only answer at this point. We're behind in our mortgage payments, our house is 175k upside-down, we owe 85k in CCs, 100k in student loans, etc.

What problems do you forsee, if any, with my income situation? I'm guessing there will be no change in my income before/after the 341.

-AA

[BCA2009]

It's a six month look back. In this economy, people are having income cuts for all sorts of reasons. Unless the trustee suspects some type of fraud I don't see any problems.

For example if you are still working at the same job, he will want to make sure that you aren't deferring payments for already performed work until after your BK. He would probably never know, but it might raise questions if amazingly your income shot back to the previous level and you appeared to get a "catch up bonus" or something like that immediately after discharge.

[AlmostAmos]

Thanks for your opinion BCA - I appreciate it. I work for the federal government - no way to defer payments! I guess I'm nervous about "what-ifs" and am trying to figure out all the potential problems.

I have my first meetings w/ attorneys tomorrow - can't wait!

[SMinGA]

A few questions.

What is the situation on your home? 1st mortgage only, or 1st and 2nd? If there is a 2nd, is it worth less than the 1st? Are you planning to stay in the home, or let it go?

If you owe more on the 1st than it is worth, and want to keep the home, then a ch. 13 may be ideal for you as it can strip the 2nd (since it is fully unsecured) and allow you to make up the past due payments thru the plan. If you're under the median (6 mo look back) you would most likely be able to do a 36 month plan. But you'd need to be able to make plan payments. Your student loans could probably be deferred til after - though when you're ready to tackle that hurdle look into 'income based repayment'. Your payment gets reset based on income & family size, not total loan amount.

[AlmostAmos]

SMinGA -

1) 1st & 2nd. The first is for 350k, the second is for 85k. Both w/ the same lender. The house is worth 250-275k. Let it go most likely...

Thanks for the info re: student loans.

[ItsJustMe]

My husband had to work his schedule to come under the Means. This meant about $30K different in our 07 and 08 taxes. It was not mentioned at all.