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JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience:  Attorney in the practice of Bankruptcy Law since 1996
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We are in the process of filing for bankruptcy, hoping to ...

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We are in the process of filing for bankruptcy, hoping to file Chapter 7 but probably Chapter 13 in July and the lawyer is starting to do the means test for us. He is going back 6 months with our earnings but he says he needs copies of paystubs from 60 days before our filing date, which includes a 'vacation payout' check that I wasn't expecting, paid July 3rd. Will the trustee take that pay or if we end up filing Chapter 13 will they make us pay more during the 3 to 5 year payback period? This is the first time I have gone through this so I'm starting to get stressed. Any advice or help would be appreciated.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 6 years ago.

Hi Nate:

The court doesn't normally take amounts you have received within the past 6 months, but all amounts you earned within the 6 months are figured in to your monthly average, which can affect your ability to file Chapter 7, or your Plan payment amount in Chapter 13.

Some people wait until 6 months from a windfall so it is not figured in, and others try to explain that the 6 month average is inflated and thus not indicative of your future earnings. I have done this from time to time with some success.

Of course, each court varies, but I'm sure your lawyer knows the local disposition regarding the Means Test and all its asinine complexity and can guide you through it.

Don't be stressed, that's what you pay your lawyer for. ;)

I hope this helps and a positive feedback is always appreciated if this was useful to you.

Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above (c) by Joseph Ross, all rights reserved.

 

Customer: replied 6 years ago.
So the 60 day period of earnings up to the bankruptcy filing date is just for informational purposes too?
Expert:  JoeLawyer replied 6 years ago.

Nate:

Well it is different from district to district, in my district all 6 months has to be provided to the court, but my guess is that in your district the court did not want to be inundated with some much paperwork, so they apparently reduced the requirement to providing 60 days and then they compare that to the amount on your Means Test to be sure the numbers you provided are supported by your paystubs. But yes, the paystubs the debtor provides are generally for informational purposes.

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above (c) by Joseph Ross, all rights reserved.

Customer: replied 6 years ago.
We did already provide the 6 months of paystubs (Jan-Jun)I totally understand that part for the means test but I think since we are filing for bankruptcy in mid July they need our paystubs from July 1st up to the date we sign the bankruptcy papers. I am concerned about how receiving an additional payment from the company I work for for my accrued vacation hours that they decided to payout July 3rd will affect how much we will need to pay the trustee over the 3-5 year period or is that decided off of the means test and it doesn't matter how much money we make after that 6 month period that is used for the means test?
Expert:  JoeLawyer replied 6 years ago.

I doubt if it will affect you substantially. The Means Test usually looks at the previous full six months, but they also look at paystubs up until the date of filing and even up until the date of the Meeting of Creditors to be sure there wasn't a raise or something that was not reflected in the average.

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above (c) by Joseph Ross, all rights reserved.

 

Customer: replied 6 years ago.
So in your experience if I did receive a raise or the vacation pay after the 6 month period but before filing or the meeting of creditors does that change the amount we would need to pay the trustee?
That's what we are basically worried about.
Expert:  JoeLawyer replied 6 years ago.

Unfortunately, income changes can make the payment go up. I think Trustee's vary from district to district, and even within a district, so I don't know how aggressive your Trustee will be about making the change. I have some Trustees in my district that will immediately make the payment go up to reflect the new income, other Trustees who don't seem to care unless the increase is substantial, and others who check income annually (by looking at tax returns).

So, I don't know what to tell you will happen, but the Trustee certainly can make the payment go up immediately for raises, though they usually don't for one-time payments if the debtor can explain that payment's uniqueness.

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above (c) by Joseph Ross, all rights reserved.

JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience: Attorney in the practice of Bankruptcy Law since 1996
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