Income means testing question

[smoothdude]

For the last six months I have been on work disability from work, but next month I will be off disability and will be unemployed with no income coming in except my wife income. Currently, we make too much money to qualify for chapter 7, when you factor in my disability and wife income. My question? Since, I will be unemployed just before I file next month will they still go back and count my last six months of income? One lawyer told me since i will be unemployed before I file they will not count the previous six months of income. This doesn't sound right to me.

Seattle, WA

[tcreegan]

Hi smoothdude,

Your instincts are good...it is the avg of the last 6 months and that is pretty hard and fast.

BUT...you can fail the means-test and still stay in a Ch 7. The more important result is the disposable monthly income (DMI) found by Schedule I minus Schedule J ...the post-BK income and expenses. If you don't have enough DMI post-BK to fund a Ch 13 plan, you can stay in the Ch 7

BUT...faiing the means test means the UST will bring a presumption of abuse motion to dismiss that your attorney needs to counter that. So you and attorney definitely need to be on the same page.

And, did you fill out the expenses deduction part of the means test and are still over median-income?

Good luck with this, keep us posted on how things turn out!

Tom in Colo

[smoothdude]

Thanks tcreegan,

This make sense.