Rental Income

[downwardspiral]

Ok, I know we have to show income for the past six months, but what if during that six month we received $2300 in rental income. $1200 of this is gone as of this month, the other $1100 will be gone by July. Will that affect our means test, or do factor out that money? It wouldn't make sense to include it since it really doesn't exist anymore. It's not going to help us pay our bills. Anyone have any experience with this?

[Scott50]

I think you answered your own question- Rental Income is income and must be included in the six months snapshot.. Why would you factor it out? . I wish I could have used that arguement with my trustee- its income but it since I spent it already so it shouldn't count..

[TX Bluebonnet]

For the 6 month lookback period, you need to show income as far as what you actually received (payroll checks, rental income, other income). It's not asking what you haven't spent yet.

[downwardspiral]

I understand, but my question is when calculating my monthly budget, will they take the rental income into consideration? It would not be fair as half of it doesn't exist anymore and the other half will stop as of June. That's my fear. They'll see my monthly expenses as say $100, and my take home income as $500 and say I have plenty left over, and move me to a Ch 13, when in reality my take home income is $100.

Do you understand?

[TX Bluebonnet]

Sorry, I thought when you said "gone" that you meant it was spent. I'm not sure when you plan to file. But, this is my understanding of how it works...

When you do your monthly income/expense sheets, only include income you are currently receiving, or expect to receive in the next 12 months. So if the one rental income of $1200 stops this month and you're filing in June then you would not include that as income in the budget section since you will no longer be receiving it. Now for the other rental income of $1100 that's stopping in July (I'm assuming you're saying you'll receive the last rental payment in July), and you file in June, you would expect to receive $2200 for June's and July's rent. Take that $2200 and divide by 12 to spread it out over the next 12 months so it would end up being $183 of "monthly" rental income. If your plan is to file in July then it would be $92 (1 month at $1100/12= $91.66). And an August filing wouldn't include any rental income.

Hopefully you'll understand the main idea of what I'm saying, and realize this is jsut my understanding, not necessarily fact. Your attorney should be able to help with this, or maybe some other people here will chime in.

[downwardspiral]

Thanks!!!!!!!!!!!!!!

[lrprn]

I hate being the bucket of cold water here but if you received the rental income during the six full calendar months prior to filing, then you must count it as income when you fill out the Means Test and Schedules.

It doesn't matter that you spent it and it doesn't matter that after a certain time you won't be receiving it any longer. You can thank your 2005 congressional representatives for the required Means Test that is often unfair to those that are self-employed, work on commission, etc. - any situation that causes a filer to have a larger-then-normal income the six months before filing. You're caught in an unfortunate situation where the income calculation ball doesn't bounce in your direction.

If you are filing with a lawyer, then that's whose advice is the most reliable one to take about this situation.

[TX Bluebonnet]

Okay, very sorry about any misinformation. I was basing my answer on my situation where I only worked the first 2 months during the lookback period. My attorney said that while it's included as income rec'd during that timeframe, I wouldn't use those 2 months worth of income on the income/expense schedule since I'm not currently employed and therefore don't have any income to budget for myself (husband has income). Thought this was similiar.

edit: Oh, and I also thought I'd read somewhere that if you know you're only going to have income for a short period to spread it out in the same way as you would for expenses. I guess I mispoke and again sorry for any confusion.

[downwardspiral]

I hate being the bucket of cold water here but if you received the rental income during the six full calendar months prior to filing, then you must count it as income when you fill out the Means Test and Schedules.

It doesn't matter that you spent it and it doesn't matter that after a certain time you won't be receiving it any longer. You can thank your 2005 congressional representatives for the required Means Test that is often unfair to those that are self-employed, work on commission, etc. - any situation that causes a filer to have a larger-then-normal income the six months before filing. You're caught in an unfortunate situation where the income calculation ball doesn't bounce in your direction.

If you are filing with a lawyer, then that's whose advice is the most reliable one to take about this situation.

You know that would make no sense. If they used that money to calculate what I have left over each month, then of course I'm going to have tons over if I don't have anymore bills to pay or the two properties to pay on. So how can they put us in a Ch 13 when we physcially don't have that money anymore.