6 months income question

[Notes4fr]

When figuring out the 6 months income, is it SIMPLY your income from the last 6 months?

Here is the reason(s) for my question:
I get paid every two weeks. Jan-June of this year did not have a month with three checks in it. Do I have to average out the checks so that the 6 month income is based on 13 checks, even though I only received 12 checks in that 6 month window?

The lawyer I've been working with has also taken the amount from my tax refund from the prior year, and divided that by 12 and added it into my amount for "disposable income" for the Schedule I, on the basis of "I'm over withholding, so the amount I'm deducting from my paycheck is too much and it needs to be brought down to the "right amount". "

This might seem more of a Pro-Se question, but I am using a lawyer for my Chapter 7, and I want to understand the whole process and numbers...

I would think that you would ONLY include income EARNED during that 6 month window, so the Income Tax refund would be an asset (from the prior year) but was NOT income earned from this 6 months, but earned last year... not factoring it into Schedule I.

I also think that the 6 months income for both Means Test AND schedule I would JUST be the income from that window and NOT a mathmatical average...

Any ideas or thoughts?

[teacher]

To get the 6 month income, you take every gross dollar earned in the 6 month period, add it all up, then divide by 6 to get the average income for the 6 month period.

I think.

[justbroke]

When figuring out the 6 months income, is it SIMPLY your income from the last 6 months?

It's just simply, all income received from all sources in the past 6 months. If you only received 12 checks, you only received 12 checks. What you should be putting is what the YTD is on your 6/30 (or so) check, plus any other money that you "received" (IRS refund, "side job" income, etc).

The lawyer I've been working with has also taken the amount from my tax refund from the prior year, and divided that by 12 and added it into my amount for "disposable income" for the Schedule I, on the basis of "I'm over withholding, so the amount I'm deducting from my paycheck is too much and it needs to be brought down to the "right amount". "

This is actually a good tactic. It is also required in some Districts that the debtor's attorney included over-withholding or under-withholding. (I was looking at a "quick-calc" sheet for one District in Florida and they too have a calculation for over/under-withholding!)

I would think that you would ONLY include income EARNED during that 6 month window, so the Income Tax refund would be an asset (from the prior year) but was NOT income earned from this 6 months, but earned last year... not factoring it into Schedule I.

Unfortunately, the Bankruptcy Code does not read "income earned in the prior six months". It reads "all sources that the debtor receives... without regard to whether such income is taxable income"

I also think that the 6 months income for both Means Test AND schedule I would JUST be the income from that window and NOT a mathmatical average...

Nope. It's purely mathematical.

[optimistic1]

I agree with the notion that it is based on your calendar income for the previous 6 months, not a averaging. No one else bases it upon a yearly averaging, thats why many people wait to file, so that certain months where you made more money will drop off.

I also agree with you on the Schedule I, he is not making any sense by increasing your income based on a previous years tax return. It's not really income, its your own money that you are getting back because you had too much withheld.

I personally think your attorney is overthinking things, and getting a bit too technical, but that's just me. Maybe this issue has come up in the past, and that is why he does it the way he does it.

[Frshstart09]

Use the gross income from all paychecks in last 6 months and divide by 6. If you didn't have a 3 paycheck june this time, it works to your advantage (you only have to average your ACTUAL income). As far as your overwithholding question, your attorney may want to make sure that your income is accurately represented to avoid any flags from the UST. If this adustment provides too much disposable income for you, you may want to reevaluate your withholdings or necessary pay stub withholdings (i.e. retirement contribution, health insurance). Good luck.