Question about Income and Chapter 7

[Newday1]

It seems like I live on these boards and that thinking about BK is all I do these days...
I have just a couple of questions for you regarding income.
My spouse is filing for BK and I will not need to.

1.) I made bonus money on three separate checks within the six month look back that puts us over the median household income by a very marginal amount. Without those bonuses and with my normal salary, we completely pass the means test by a healthy enough margin (at least by median income). Does the attorney we end up hiring have a good case to show the trustee that this is not my normal and expected income? We have not asked the attorney yet. We will when we meet with them. I am just wondering if something like this has come up before and someone has managed to have a succesful Chapter 7? Or, are those bonuses, which are not typical and in no way shape or form to be expected, going to prevent us from even being considered for a 7? Or, would we be scrutinized that much closer?

2.)What would be the circumstances where a trustee would do a 12 month look back instead of just a 6 month lookback. If our income were looked at 12 months back, my spouses would put us over. My spouses income fluxuates so much that one month may look good and he might make a nice check that month, but might not get paid for a month or two.

Thanks for any feedback. I am sure these questions have been asked before.

[despritfreya]

1.) I made bonus money on three separate checks within the six month look back that puts us over the median household income by a very marginal amount. Without those bonuses and with my normal salary, we completely pass the means test. . .. Does the attorney . . . have a good case to show the trustee that this is not my normal and expected income?. . .

No. If, after completing the means test, a presumption of abuse arises and if bonus pay is not the norm and will not happen again in the near future (x-mas included), he/she may suggest you wait until the higher earning months are outside the 6 month window.

2.)What would be the circumstances where a trustee would do a 12 month look back instead of just a 6 month look back. If our income were looked at 12 months back, my spouses would put us over. . .

For the mechanical approach of means testing, earnings outside the 6 month window is not relevant. However, you still have to show on your real budget (Schedule I and J) that you cannot afford to repay a portion of the debt. If you have available cash flow at the end of the month, it could be considered an abuse under the totality of the circumstances, to allow you to proceed in a 7. If you down play your real income and up play your “real” expenses you could get caught. Your historical earnings (especially if nothing has changed) can play a role in this.

Des.

[Newday1]

Thank you that is very helpful. We will ask our attorney what they recommend with incomes that fluctuate. That's what they are hired for. Thank you again I appreciate your feedback.