A few questions regarding whether I can leave some items out to qualify for Chap 7

[bigstick]

I'm considering filing for bankruptcy and have seen two attorney to get info. Both attorney's have told me that I'm right on boarder between 13 and 7. My income is high which throws me into the means test but my expenses put me close to 7.

Do I need to include monies that I get from my live in girlfriend to pay for bills? She typically pays me via a online bank transfer, most months but not all, normally the same amount each time.

I rec'v a monthly car allowance from my job. It comes as a seperate check that is not taxed and does not show up on my W2. Do I need to claim that as income?

If I leave these two things out I qualify for chap 7.

[AngelinaCat]

You will need to include all income that come into the household, so your girlfriend's contribution will have to be inlcuded.

The car allowance is a 'wobbler'. I don't know if you should include it or not. I tend to think not, because it is provided for you as a tool to get from Point A to Point B, for the sole purpose of doing your job. The allowance is not used to pay anything for your household is it? If it is, then you may have a problem.

Good luck.

[bigstick]

You will need to include all income that come into the household, so your girlfriend's contribution will have to be inlcuded.

The car allowance is a 'wobbler'. I don't know if you should include it or not. I tend to think not, because it is provided for you as a tool to get from Point A to Point B, for the sole purpose of doing your job. The allowance is not used to pay anything for your household is it? If it is, then you may have a problem.

Yeah I was thinking I wouldn't have a way around my gf's contribution. As far as the allowance goes basically we have a choice at work to take a company car or take an allowance. Since I already had a car payment I took the allowance. I deposit the check and basically it becomes income but it's purpose is to pay for auto expenses for the purpose of my job.

Another question, how about the family size when it comes to both income and expenses. The more family or household size helps the numbers. Do I include my girlfriend? If so do I need to include her income? How about my two kids which I have a various times but don't claim a tax exemption do to the way my divorce agreement is written. Can I include them? I surely pay household expenses...water, electric, food etc on their behalf.

[AngelinaCat]

For household, yes, you have to include the GF and the children, even if they are not with you on a regular basis. Even if they are with you only two days a month, your expenses will surely jump.

[bigstick]

But I do not need to include my gf's income correct? Only the portion she pays for expenses.

[viking64]

I'm in a similar situation.

I have a partner, but we don't have combined finances. For the means test, household size was 2, but we used only my income. Partner's contribution to expenses was listed as income.

I do get a monthly expense reimbursement check, which includes car allowance, from work. That wasn't listed. It's clearly visible on my bank statements, which the trustee saw (asked for the 3 months before filing). He didn't question. It wouldn't have made a difference even if we did count it since we didn't claim the business expenses the expense reimbursement offsets. I also would have still been under median.

At the 341, the trustee did ask what assets my partner had - essentially his car and a few furnishings and personal items like his own computer. He didn't care. There were no condos in the Riviera or anything . . .

I would be careful to not claim as my own expenses anything the company reimburses me for unless I also claimed the reimbursement as income.

[bigstick]

Thank you, that is very useful information. My problem is her contribution takes me into chap 13 vs chap 7. Trying to find ways to get under the cap. Another question I have is in regards to bonuses. I currently get two bonuses per year. My base pay is below the median, but with my bonuses it takes me above. I can have my employer delay my next bonus check so that I can show 6 months of base pay alone. Will the trustee quesition me on upcoming pay increases / bonuses? Or is the law simply to show 6 months of income..period?

[facingfuture]

I think you should retain an ethical attorney and be completely honest in your filing. Bankruptcy is intended for people who are truly insolvent and unable to pay their debts and bankruptcy preparation is legitimate only if it's honest - not intended to conceal income or exaggerate expenses. The custody agreement for the children and their status as your dependents for income tax purposes will, I'm sure, be looked at carefully by the trustee. If you claim your girlfriend as a household member for expense purposes, her income will also likely be considered. I guess I believe that honesty and integrity are the foundation of a fresh start.

[newbie2]

Bigstick: Yes to including your live in girlfriends income that she contributes to the household.

Also, if you receive a check for your car I wouldn't think you'd be able to claim your car payment (or ownership expense). Your car expense is already covered (it appears) and therefore may not be an expense to you.

You really need to be upfront with the attorneys you consult. Please re-think the "leaving things out" in order to qualify for a Chapter 7. Doing so could mean serious long term ramifications for you.

[bigstick]

Thanks for all the good info!!

[viking64]

Thank you, that is very useful information. My problem is her contribution takes me into chap 13 vs chap 7. Trying to find ways to get under the cap. Another question I have is in regards to bonuses. I currently get two bonuses per year. My base pay is below the median, but with my bonuses it takes me above. I can have my employer delay my next bonus check so that I can show 6 months of base pay alone. Will the trustee quesition me on upcoming pay increases / bonuses? Or is the law simply to show 6 months of income..period?

The trustee will ask you at the 341 if you expect a change in income (bonus, raise, inheritance, etc.)

You definitely need to claim your entire income and every single expense you have. A good attorney will help you make sure you don't forget any expense or overlook any income.

Also, if you receive a check for your car I wouldn't think you'd be able to claim your car payment (or ownership expense). Your car expense is already covered (it appears) and therefore may not be an expense to you.

I know an attorney would have to massage this around to get the accurate numbers, but if the car allowance only covers part of the cost of the car (say, mileage used for business purposes, reimbursed at the IRS rate), then expenses for personal use would surely be allowable?

Accurate records to back everything up would be required to determine the percentage of personal/professional use. Or, your net car expenses would be the total expenses (payment, fuel, maintenance, registration, insurance) less whatever your company reimburses you. Thus, probably the need for claiming that as additional income even if it's not taxable as income but then using your accurate car expenses to offset it for DMI purposes.