6 month "snapshot" and balloon payment

[emiss]

I just had my second meeting with our attorney and I'm hoping to file by the end of this month. A bit of backstory:

I'm a teacher and my husband is self employed and is very much in the hole in terms of income. We're around $40,000 in cc debt and had to stop paying last September. We knew we had to file bankruptcy but we had to wait until after our mortgage loan modification went through before filing. The loan modification became final on June 15. So, we started to prepare to file.

Since I'm a teacher and we don't get paid during the summer, I get a balloon payment on the last day of school to get me through the summer, and then I don't get another paycheck until mid September.

Today when I went to go over all the numbers with the paralegal she said that the balloon payment will bump me over the limit to file chapter 7. But, the reality is, that's not a single "paycheck" or a bonus, it's five paychecks all paid out at once since they don't pay us for five weeks. She said that the court probably won't look at the reason for the payment since they just look to see a "snapshot", even if that snapshot is horribly deceiving.

She's going to check with the attorney and get back to me in the next few days, but I'm just feeling frustrated. We can't wait 6 months to file...I just need this over with, and I know someone is going to get around to suing us soon. I just hate that we might be pushed over by something that, if we were able to clarify it, really isn't what it looks like.

I guess the question is, does anyone know anything about how balloon payments are assessed?

[SMinGA]

For purpose of the means test, total income from the 6 months prior to filing is used to show a monthly average. I'm guessing that by September you'll be back to normal?

If you file in Aug - the 6 month look back is February-July.
If you file in Sept - the 6 mo look back is March-August.
If you file in Oct - the 6 mo look back is April-September.

With the loan mod done, you don't have to worry about foreclosure. If no credit cards have already started a lawsuit - don't file til there is enough time that the average works in your favor. If they have filed a case, do what you can to stall it from turning into a judgement/garnishment.

[emiss]

The "problem" is that my husband is looking for other work and I have a feeling in the next six months something will come through, so we'd be looking at a 13 then anyway. I just don't think I can wait through another six months of calls, harassment, etc. after going through it for almost a year. Maybe I just need to steel myself to the idea that we may be forced to do a 13. It's just frustrating, since it doesn't represent our real income.

[msm859]

Talk to your bankruptcy attorney. A recent supreme court decision says the court can look at "projected" income. This will account for your lump sump payment in figuring out your average.