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Relocation "Benefits" Pushing Us Over Median!

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    Relocation "Benefits" Pushing Us Over Median!

    Filing July 1

    My husband accepted a new position with a higher salary but we were still on pace to file Ch 7 in July. We would be $200 under median by July. Company is paying for (a) a furnished apartment for 6 weeks and (b) our move. My husband was just informed TODAY that both of those expenses ($1500 for apt/up to $7000 for the move) will be put on his check as a "non-cash compensation" and we will have to pay taxes on the money. I'm fine with the taxes but really not OK with having phantom income added to his check right now! It really messes us up! For some naive reason we assumed the company would pay the vendors directly.

    We checked in with our lawyer - he said there is a small chance the trustee will say it has to be counted as income. And we will be toast. He would argue that it's not "income" in the truest sense - more a one-time reimbursement/benefit.

    If anyone has any experience with anything like this I would really appreciate advice.
    Last edited by stgsm; 03-30-2010, 07:00 PM.

    #2
    yuk! but yes, relocation expenses are often counted as income, unfortunately. have you tried to talk to them to see if they can do it differently somehow? maybe agree that they pay only part of it but from a different source so it won't be counted as income? if they understand the situation they might work with you.
    filed ch7 May 09
    341 june 09
    discharged, closed Aug 09

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      #3
      When are you filing??? And when will this compensation be paid?

      The means test uses income from the 6 months prior to filing. If you file in July your average is based on Jan-Jun. If he's paid July or later you should be ok. I'm assuming you are trying to stay below median...
      Last edited by SMinGA; 03-31-2010, 06:37 AM.
      Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
      (In the 'planning' stage, to file ch. 13 if/when we have to.)

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