Bonuses as part of income - how in Eastern Michigan

[jwbbx]

Hi all,
I'm thinking I will have to BK, and it will probably be a 13 because of my bonuses. I have a regular salary, but there is a performance bonus paid company wide. The bonus can range anywhere from 10-35% of gross. It's paid quarterly IF we make our numbers YTD up to that point. So in Jan (end of fiscal qtr 1) I got no bonus. In May, I expect to get about a 14% payout. This will be annualized so I'll see 6 months pay * 14%.

My question is - how do they look at these bonuses when calculating income? In my case, the bonus has been paid for the past 15+ years at least at the threshold amount. Will they look at the threshold only?

I've looked and looked but found nothing close to my situation from doing searches. Any help would be appreciated, especially if anyone has experience in the Eastern District of Michigan.

Thanks!

ps: Does anyone have any leads on good BK attorneys in the Jackson Mich area?

[lrprn]

If you receive a bonus, even a one-time bonus, during the previous six calendar months before you file, then that bonus counts into your gross income calculation. This is true no matter which state you are in. Sorry the answer isn't what you were hoping to hear

[jetsfan2007]

I had this also come into play when I filed last fall. The prior six months, my bonuses(and the economy) were looking good. Since then, both have fallen. Now the last 3 months Ive had no bonus, which they based my bk payment on.

[rrockinggramma]

wow I live in jackson. I have sent you a pm I don't have bonuses so can't answer that one but I think your attorney here can write up your plan to allow you to keep them. The eastern district is pretty good. My income hasn't risen at all but my plan states that my income tax refunds (fed only) go to the plan. I filed under the old law so there may be some differences but I see nothing in my plan about bonuses other than income. So if in the last 6 months, those bonuses were included, then they would be a part of your income. Not sure under the new law if the income looks forward. My plan has been simple. Send in payments, send in tax refunds. The trustee's issued a joint statement that they are NOT taking the stimulus. It is yours to keep.

[Flamingo]

I am discharged old law. Our Plan required us to report all bonuses, raises, tax refunds, lottery winnings or inheritances during the course of our Plan. No ifs, ands or buts. We complied - even when my father-in-law passed away almost two years into our Plan. His estate was not large but it involved the sale of his house to my neice. We had to provide all documents to our attorney as to the sale and there were actual conference calls between our attorney and the attorney for the buyers. Thankfully, the amount of inheritance my hubby received was not enough for any interest by the Trustee and was mostly from life insurance. But our BK held up some of the things as to the house sale to my neice. We reported everything and thankfully were able to keep everything we reported, including a $3,500 payment from my former employer (which went bankrupt one month after we filed) for owed vacation and sick time (received after the company bankruptcy was finalized). We were worried about the $3,500 but told our attorney we needed a new computer for our house and also had to withhold 20% state and federal taxes from that amount. We were allowed to keep the total amount.

Since you will probably continue to receive bonuses throughout your Plan, specifically question your attorney about those and the fluctiations in your income and the attorney will advise you specifically what to do. Chapter 13, as I always state, is not a cookie cutter situation for everyone. You cannot rely on what is done for someone else who files because it will not be the same for you.

Best of luck to you...

[MajorMike]

I had a big sale come in right after I filed. In fact, my attorney said, don't put it through until after I file. It was for $7K. The trustee never said a word about it and my attorney put it in our BK as future unpaid earnings..
We have a cool trustee.

[jwbbx]

There seem to be a lot of variations. It looks like I'll get a 2nd quarter bonus, which will pay at end of May. They are annualized, so it will catch up what wasn't paid in Q1. I guess I just have to pick the best 6 month window to use. I really don't want Dec in there, that's the biggest one.

[chloe0724]

Let me know how it works out. I too get bonuses for my performance each quarter. They are never guarenteed, but I am trying to wait for the most favorable 6 month period. I hate this game. I also was working a second job for many months prior to deciding to file, and my attorney told me to quit it as soon as I decided to file. I have to wait for that to drop off as well.

[wooisme]

usually what will happen is they will come up with a base amount that will be added into the plan and anything under the base you would be allowed to keep, anything over it you would have to pay back. As an example....my husband gets a bonus in december but we never know what it is. we based it on the previous year and added that into the plan as income so that we could keep at least that much money. This past december it came in over the amount of $600 and we were allowed to keep the overage.

your attorney should average out all the bonuses and come up with a base amount and that should be added to your plan as income...at the very least.