what if?

[Maine]

yes, this is another means/I & J question, for a friend who was going to file but she just got a job since her son is finally starting school. (her son and my daughter in same pre-k )

so, what if means shows family income of 2500k/ month (they lives off cc's and loans)

but a new job is causing actual income to become 8000k/mo- she started job last week so can not delay acceptance until after file, she will use new job in sched I, pretending not to have that income coming is not her style.

let's say the expenses on J can easily cover the 8000k, and are all legit/defensible spends. (family of 4- 8k/mo is def over median)

Will this still invoke a "totality" objection???? She is freaking out worse than I am!

[BKDefender]

She qualifies to file a Chapter 7,so she should go ahead and do it, but she should prepare for the trustee to file a motion to dismiss based on the totality of the circumstances or in the alternative a motion to convert to a chapter 13.
If the trustee doesn't convert then she's good. If he does, then she will have expected it and reduced her expenses to a point where they can do a 13.

--William

[Maine]

Thank you for you answer William. She will not love it, but at least is is honest.

Let's throw another wrench into the equation then. Of the $5500/mo in her new job- $2500 will be untaxed reimbursement for required training, tools, professional memberships and company paid travel expenses.

It looks like the $2500 goes into income as "business income" but comes right back out as "business expense."

If that is true it seems like the family income for 4 people is truly $5500 (him $2500 her $3000) Which is again under median and would not raise any totality of circumstances rejections.

Am I understanding this right???? Or close?

Thanks for any input

[tcreegan]

is a loan income?

Hi Maine !

so, what if means shows family income of 2500k/ month (they lives off cc's and loans)

I'm no accountant, but I thought loans and cc $ were not income.....

Had a thought on the 2500 business expense money, maybe keep this out of the household bank accounts? ....just thinking about the rules for IRA money, by itself in an account it is IRA money, but once "co-mingled" it becomes regular money.

Just a thought, (probably worth the proverbial penny)

Tom in Colo

[Maine]

Hi Maine !

so, what if means shows family income of 2500k/ month (they lives off cc's and loans)

I'm no accountant, but I thought loans and cc $ were not income.....

Sorry Tom- that was my confusing language- Her spouse makes $2500, they have used cc's and loans to pay the remainder of their bills...

Had a thought on the 2500 business expense money, maybe keep this out of the household bank accounts? ....just thinking about the rules for IRA money, by itself in an account it is IRA money, but once "co-mingled" it becomes regular money.

If keeping it separate made it business income and not household gross income I am sure she would do that. If her bank is like mine they can link up her accounts and direct deposit different parts of her check into each account.

Do you think if she keeps it apart then it will be counted separately? Maybe that will make it easier for the trustee to look past the bottom line of $8k and see that the family is only living off $5500 of it?