Income Question.

[spidge]

Last year I had to use 3 hardship withdrawals from my 401k in order to pay my mortgage. I also recieved a class action settlement that was over a year ago now. Both made my taxable income much higher than actual income.

How will these be considered in BK.

Normal income is 65,000
401k hardships is 17,000
settlement was 15,000

The settlement after taxes was only 9,000 and was used for almost 3,000 in a car repair, pay for braces(700), and the rest to catch up on basic household bills and the mortgage. I had a very large payment at the time.

Any thoughts?

[justbroke]

Since it was more than 6 months ago... it doesn't affect your "current monthly income" calculation as far as the Means Test goes!

However, your Normal Income may be over the median for your State and household size.

[spidge]

Thanks for the resonse. In CA the limit for a family of 4 is 79,971.

Do you think it mat raise a flag when the trustee sees the tax statements?

[justbroke]

Thanks for the resonse. In CA the limit for a family of 4 is 79,000(not exact).

Do you think it mat raise a flag when the trustee sees the tax statements?

Excellent. I don't see any red flags at all. Those were "one" time events. They may ask if you gave the money to any family or friends (to determine if you made insider or preferential payments or fraudulent transfers to hide the money). Other than that... I don't see any red myself.