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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 16406
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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On the Means test it says in box 2, page 2 that all figures

Resolved Question:

I want to make sure I am doing this right,even though I did one awhile back on the computer. I did it on  my own without asking a lawyer so it may not be correct. Anyway, on the Means test it says in box 2, page 2 that all figures must reflect average monthly income received from all sources, derived during the six calendar months prior to filing the bankruptcy case, ending on the last day of the month before the filing. We filed on Aug22. Does this mean my Lawyer needs bank statements and P&L statements with the date range of Feb 22 through Aug 22? Or does this mean I just need them through July 31st with a date range of Feb 1st through July 31st?


 Also, what do I put for gross receipts?  Total sales and revenue or total income after cost of goods? We are screwed if I can't deduct the cost of goods. Gross receipts is not our true income.

Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 1 year ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

In terms of income, you will need to show proof of income which is gross income,

WALLSTREETESQ :

for the last 6 months which is from 2/22

WALLSTREETESQ :

In terms of income, a company's revenue minus cost of goods sold. Is called "gross margin" and "gross profit," that is what should be listed.

WALLSTREETESQ :

Another option is to list all income, and

WALLSTREETESQ :

list in expenses the cost of goods during this time period,

WALLSTREETESQ :

it would be the same.

Customer:

Oh, Ok. The reason I doubted it, was because of the definition of gross receipts with the IRS. It says their definition is before COGS. I'm glad that for the means test it's different. Thank you.

WALLSTREETESQ :

The means test is relevant however the trustee will look at the schedules that show expenses and income in detail,

WALLSTREETESQ :

also, be prepared to show the trustee your recent quarterly tax returns to justify your income and expenses,

WALLSTREETESQ :

That would be what is reviewed by the trustee

Customer:

I have my year tax returns. I don't have quarterly. We have an LLC and it's a pass thru entity.

Customer:

Is that good enough?

WALLSTREETESQ :

It should be good enough,

WALLSTREETESQ :

If the returns are detailed,

WALLSTREETESQ :

and bank statements of the LLC

WALLSTREETESQ :

are consistent to what you listed

WALLSTREETESQ :

it would be fine

Customer:

The returns are really not in detailed but it's close to what we have done in the last 6 months if the trustee calculates it.

Customer:

Yes, bank statements are consistent.

WALLSTREETESQ :

Bring in 6-12 months of bank statements for the LLC,

WALLSTREETESQ :

that would be beneficial, it should show all expenses and income

Customer:

I was talking to another Lawyer and I thought I sent my question to him, but I got you. But that's Ok. :-)

WALLSTREETESQ :

He was not available,

Customer:

The Lawyer said he only needs 6 months

WALLSTREETESQ :

6 months is standard,

Customer:

Oh OK. I'm glad he asked you to talk to me.

WALLSTREETESQ :

I prefer giving the trustee one year, to avoid any issues,

Customer:

Wow, I'm glad I don't have to back that far. What I have done so far has been a lot work.

WALLSTREETESQ :

for a business case, some trustees ask for one year to see if their were any large withdrawals or deposits,

Customer:

We are only filing personal bankruptcy

WALLSTREETESQ :

Ok, if it is a personal chapter 7,

WALLSTREETESQ :

6 months is fine, if he asks for more

WALLSTREETESQ :

than provide the one year,

WALLSTREETESQ :

if asked,

Customer:

Since all of our credit cards are in our name only except for 4 them. Those 4 have one our names on them and the business name with it.

WALLSTREETESQ :

that is fine,

WALLSTREETESQ :

make sure if you are liable for those 4 cards,

WALLSTREETESQ :

they are listed in your bankruptcy, or you cannot discharge them

Customer:

Yes, I will have to provide one year if he asked, but I hope he doesn't because it's been so stressful up to this point. I didn't know it would take this long. Ugh

Customer:

Yes, we put them all in the bankruptcy.

WALLSTREETESQ :

If you have a tax return and 6 months statements that is usually fine,

WALLSTREETESQ :

At the meeting of creditors, if the trustee has any questions, he may ask for more information,

WALLSTREETESQ :

however, that is later,

Customer:

What if my bank statements show 10,000 more deposits than what my actual business deposits were? The reason it does is because my husband withdrew a little over 20,000, but we have almost $5,000 in a tax refund and he put another $5,000 back into the account. That's why there is about $10,000 more than what our sales are.

WALLSTREETESQ :

you have to explain this, if it comes up,

WALLSTREETESQ :

the trustee may want evidence of this,

WALLSTREETESQ :

you should be able to show the deposits were from a tax refund,

Customer:

Ok. I'm not going to say anything unless the trustee ask us. Even though we are not doing anything wrong, sometimes our answers could screw up everything.

WALLSTREETESQ :

right, let him look into it, and ask you to explain it

Customer:

Ok, so I don't need to point out all the owner's drawings on the statements?

Customer:

I was going to list them and total the amounts.

WALLSTREETESQ :

no

Customer:

Ok. Thank goodness we are chatting. I was going to make it easy for him/her

WALLSTREETESQ :

it would be best to do this, however it is not necessary unless asked by the trustee

Customer:

The Lawyer never asked me to do that so I'm not going too.

WALLSTREETESQ :

that is fine

Customer:

I'm going to complete the means test right now. Can I contact you if I have anymore questions?

WALLSTREETESQ :

yes, you can ask for wallstreetesq.,

WALLSTREETESQ :

and I can help you

Customer:

OK, great. You have so helpful and very nice. I appreciate it so much.

WALLSTREETESQ :

Good luck, and if satisfied with our service please provide us with positive feedback, thank you

Customer:

Sure will. Thank you. :-)

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 16406
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

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WALLSTREETESQ
WALLSTREETESQ
Attorney
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14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS