Means Test: Look Back for Income but Not Expenses Too??

[alo]

I actually am wondering how trustees evaluate means tests. I'm over the medium and it will matter to my situation how they average income and expenses.

INCOME
I understand that there is a 6 month look back for income. My salary was reduced twice in the past 7 months. So, how should I calculate my income...
- I am paid weekly and some months I received 5 paychecks.
- My withheld taxes amount varied.
Would it be best to add it up based on my weekly pay-stubs for six calendar months and divide by 6?

EXPENSES - MORTGAGE
I have been offered a lower interest rate through my bank (CHASE no closing costs). If I do this/get approved, it will reduce payment by $300 (don't plan to reaffirm but plan to stay and pay).
This reduction may only effect one month before I file. Do I use a look-ahead number (the lower one) or the average I've paid?
In this case it would be better for me to take the average.

EXPENSES - INSURANCE
I added life insurance (will only be in effect for four or five months). I asked this question before and was advised to use the monthly premium not the average paid over six months.
In this case it would be better for me to take the current amount.

Where I'm going with all this is...if you average the income shouldn't you average the exempt expenses, too??

This is all having to do with calculating my DMI on the means test since I am over the medium (almost double). I know that the I/J forms are for using actual numbers. I don't show any DMI on them either since my current income is at a the lowest.

TIA

[justbroke]

Calculating income is very easy for weekly earners! You multiply the weekly earning by 52 and then divide by 12 to get the monthly earning. (That accounts for months where there are 5 weeks in the month.) In fact, this is how the Trustee will come up with your monthly earning amount. Some people try to "fudge" the number by using the weekly amount multiplied by 4, but there are not 4 weeks in a month (except for February).

Expenses are also averaged, but over the same 12 months. A good example is in my Chapter 13 case. I live in Florida and my electricity is at least twice as expensive in the summer than in the winter. So, I added up all 12 months and divided by 12 to come up with my energy costs.

Unless your bank actually reduces your payment and modifies your mortgage (by changing the terms of your mortgage), then you list what is "contractually" due each month. Even if you are in some sort of forbearance period where the amount is reduced (or $0), you list what is contractually due. Schedule I/J should be current with a forward looking influence.

Are you considering filing pro se? The UST will likely intervene, become "interested", in your case solely because you are over-the-median income. You really need your ducks all aligned and quacking to overcome any objection from the UST.

[alo]

Thanks. Okay, I can average out the income as you suggested. That is easy!

What about the withholding? I noticed that at the end of the year, I must have maxed out and less was taken from my paycheck (in Nov. and Dec.). I will probably be using income for October-March. I had a salary reduction in December. So, do I use the same method? Look at yearly amounts and divide by 12 for the monthly then take the 6 month average?

Regarding my mortgage, the contract would change. I would have to do the deal before filing BK, not sure if it would be offered afterwards. So, I would probably have one month with a reduced mortgage payment. So, for I/J forms I would use this new reduced amount. But for the means test, I'd like to use the average, 5 months of the higher payment, one month of the lower. It seems only fair since they are making a decision whether or not there is a presumption of abuse based on average salary. (Yes, I used the F word FAIR!!) If not allowed, I may just wait a couple more months so that my means test is based on the lowest salary level for all 6 months.

I plan to use an attorney. Still consulting with a few. Actually, need to get back to reviewing them. I took a break and have been learning about BK here on this forum. So, I feel like I can ask the right questions and go into a meeting knowing that I can qualify for Ch 7 (and decide if it is the best move for me). First three attorneys didn't really consider Ch 7 for me once they heard I was over the median. They never asked about my expenses/situation. Yes, they were free consults with limited info exchanged but I would have preferred they made mention that some over the median folks do file Ch 7 successfully.