Means test and date income received

[JustDo]

I received at $6,800 consuliting check on July 25th from work performed on July 5-July 13th. In regards to the means test, how long would I have to wait to file for this income to not count as being in the previous 6 months.
Thank you

[debtmonster]

What if you started an S-Corp or LLC and paid yourself a salary from that and then you could throttle your income down to under the median income, couldn't you?

I'm in a similar situation. I am an independent contractor and my income fluctuates and I want to see what my attorney says as I want to file a Ch. 7. Do you have any business expenses to earn that income? I write off tons of business expenses each month since I have a home business.

[laurannm]

I received at $6,800 consuliting check on July 25th from work performed on July 5-July 13th. In regards to the means test, how long would I have to wait to file for this income to not count as being in the previous 6 months.
Thank you

You have to wait until Feb of '09 for that income to fall outside of the 6-month lookback

[jessegirl]

with the 6 month lookback does that mean that even if you get a bonus and it still shows up on the ytd as an incentive bonus the trustee still cannot question it?

[getouttadebt]

Yes, bonuses count and it will be factored into the CMI calculation.

Good luck,
getouttadebt

[magyar123]

If the check does NOT have a provision like "Void after 30, 60, 90," or whatever days printed on it - OR the company doesn't have a policy to put a blanket stop payment on uncashed checks after a certain time - hold on to it until you are discharged.

[debtmonster]

I sometimes get a bonus of $2000-3000 in December. I use this to pay my taxes. I don't keep any of it. That's going to mess me up big time.

Do they simply do an average of your income or can you not make more than the average for any given month?

This has been my income all this year:
1/15/2008 3384.78
2/15/2008 2983.16
3/14/2008 2998.66
4/15/2008 4250.89
5/15/2008 5212.48
6/16/2008 4328.14
7/15/2008 4977.02
8/15/2008 4615.87

Would I be able to file Ch. 7?
The average over the past 6 months is $4397/mo.. And if you subtract my business expenses each month for that which is typically $200-500/mo, that knocks the average even lower. Would I pass or would the month of May, July and August really mess me up?

[lrprn]

Do they simply do an average of your income or can you not make more than the average for any given month?

Sorry, but the six-month income look-back is calculated using the actual figures, not an average. That's what makes the 2005 changes in the bk law so unfair to independent contractors, consultants, and anyone else who has income that varies widely from month to month.

Keep in mind that the look back is by full calendar month, not by date. In other words, whether you file Sept 1, Sept 15, or Sept 30, the look back is still March 1-Aug 31.

Even with your income ups and downs and even if you are above your state's median income on the six month look-back, depending on your state's exemptions, your living expenses, and payments for your other secured assets, you still might qualify for Ch 7. Have you met with 3-4 bk lawyers yet for free or low-cost initial consultations to find out where you stand?

[Phillymanhere]

debmonster,

it's not an average. It's a 6 month look-back. Period. No if's but's qualifiers.

If total income received during previous six months is above the median (or half the median) for your state, you're above the means test. Keep in mind that being above the median does NOT disqualify you from filing for a chapter 7. Please read old threads on Schedule J and the Means test for ample writings on this.

So you could have an average of 5K a month for 6 months and your income is 30K, which is above the median for my state, which is 21K (half a year). Or I could have gotten 30K in one month and 0 in the other five months and I'm at the same place. Nothing to do with averages.

[debtmonster]

The median income for a married couple is $50k/yr. When I add up those figures, I am at $26,000. That's for my home business... then me and my wife worked a short time which will add a couple thousand more on top of that... so I'm close. I'll have to wait a few more months to file then. If I get my next two checks to be right around $3,000 or less, I'll be hitting close to the median income.

A friend of mine found another bankruptcy attorney a lot closer. I'm going to see about calling him tomorrow.

When I spoke to my wife again a little while ago, she said that she refuses to give the furniture back. If we do a Ch. 7 on Rooms to Go, are they going to want that used furniture back? We've bought the furniture at the end of December 2007. I tried to attach pictures but this thing keeps saying I'm over quota.