Covid 19 related mandatory overtime

[nick117]

Since march 2020 my monthly income has gone from $2000 to $4500 as a result of mandatory overtime. I do not know how to accurately represent this temporary change in income in my chapter 7 filing. Do I need to take a means test ?. How do reflect that issue in my Schedule i? How and where would I use the 6 months look back to come up with a average value for the appropriate Schedules?.I am in a 1 person household bracket for the purpose of median income. The overtime can not be refused...

[justbroke]

Since the Means Test is a 6-month lookback, the income might be included in the calculation of whether you should be in a Chapter 13 (e.g. you have the "means" to fund a Chapter 13). It will be based on when you file.

The outcome will likely depend on how long this overtime lasts and how it affects your lookback. If you can't delay filing for Chapter 7 then you'll need a good attorney that could articulate that a hypothetical Chapter 13 would not be possible because the income was temporary. But right now, your Schedule I would show the current income.

But, even if you are making $4,500/month, that still just puts you "right" at the median income for Florida for a household size of 1. With the way the lookback is calculated, you would definitely be under-the-median income. In other words, you'd need 6 months of $4,500 to get to the median income for Florida. With other months at $2,000 in the lookback, you are not likely to get to the median income until you hit 6 months at that pay rate.

[nick117]

thank you for your guidance...

[flashoflight]

I think a trustee could argue that this overtime is not a one-time incident and will likely last for months or years depending on the availability of a vaccine and whether it is possible to have herd immunity. I don't think you or any lawyer can argue that it doesn't belong in the means test. The longer you wait, the more months the overtime will adversely affect your means test. Your looking-forward schedule I/J could be an issue as well even if you are below median on the means test since you may have above zero disposable income and the totality of the circumstances dictate you really belong in a 13. Pre-covid I think it's fine for pro se. Now I think you might need a good BK lawyer to avoid a 13 because of I and J or do a really, really good job with sched J and be ready to show receipts for everything if challenged.

[nick117]

thank you...

[nick117]

I went back a reviewed sched J and no matter what i did, I am showing disposable income due to this mandatory OT issue . However, we were just scaled down to just one mandatory day and an extra $2 P/hr will end June 6. Can I use those facts to sway the current (forward look) situation?

[justbroke]

I wouldn't even worry about this nick117. A Chapter 13 Trustee would likely only look at income changes year-over-year and only in places where the Trustee requires a copy of your tax return each year. Unless your income went up over 10% year-over-year, I don't think any Chapter 13 Trustee would care.

As for what I wrote earlier, even if you did make the additional money, you're still under-the-median. You'll have to gauge your expenses, which I think you attempted, but an attorney would be much better at finding your "actual" expenses and what are your true monthly costs. While I use the Means Test as a guide, there are so many things we forget about (often those once-a-year things, new tires for car, repairs, haircuts even).

Usually, the United States Trustee (UST) is not likely to nick-and-dime an under-the-median filer. Usually.

[nick117]

Bu my intent I to file for a chapter 7...my house is exempt ...my car is worth $ 2500 (will offer to buy out from UST)... new big screen tv ,fridge and stove are only items at risk. Until last month only had a couple hundred $$ in savings,with this OT situation, account balance has increased to a couple of thousands $$ . As for year to year income,I only worked 3 months in 2018 but full year in 2019. Finally , does UST request tax returns in FLA ,Middle District?

[justbroke]

Tax returns for the prior year must be filed. The Chapter 7 Panel Trustee (or the Chapter 13 Standing Trustee) will (usually) request two additional years of tax return. Tax returns are one of the key ways for the Trustees -- and the United States Trustee (UST) -- to determine your income and to look at any trends. They also use them to determine what you usually claim for deductions.

So prepare to have the last 3 years of tax returns ready (Federal 2017, 2018, and 2019). If you haven't filed 2019, they will require that it's done at some point.