How to calculate Schedule I income

[tdawg]

Hi,

I have read several posts where it says that Schedule I income is supposed to be calculated based upon the past 6 months of income, just like the means test. However, in the following book at this url, it seems to say that Schedule I income is based upon what you are currently making and expect to be making in the future:

http://books.google.com/books?id=dv0...income&f=false

Does anyone have a reference to prove this one way or the other? I am in this situation since I am scheduled to be laid off Oct. 31. I pass the Means test, but my car payment might not be allowed on the schedule I which might cause me to fail the I-J test if I have to use my last 6 months income. But if it's based on unemployment (which I'll be earning), then I'll pass the I-J test with flying colors.

Thank you for your time.

[justbroke]

Much of what goes on Schedule I/J is based on caselaw. There are many camps that say that the Income on Schedule I is forward looking. There are some that say that it is backwards looking and the same as the "current monthly income" calculation enumerated in the Means Test (11 USC 707(b)).

However, the real deal is can the income on Schedule I be defended when there is historical information provided by your paystubs and tax returns? That's to say, unless your paystubs show a trend, how do you not put your average monthly income over the last 6 months? So, the question will continue to be delicate.

Prior to the Means Test (pre-BAPCPA), Schedule I was in fact a snapshot of your current income. However, you substantiate that by producing paystubs and tax returns indicating what you have been paid. While it wasn't averaged, like on the Means Test, it was certainly a figure which represented your average pay.

The problem, in the end, will be that there's still the Means Test and the Trustee will compare the two. The do look at Schedule I and J, and then the Means Test as well.

Being scheduled to be laid off? You'd still put your "CURRENT" monthly income. There is a narrative on line 17 of Schedule I which reads "Describe any increase or decrease in income reasonably anticipated to occur within the year following the filing of this document:". To me, that indicates that what you put on the form is actually your current monthly income, and not a future amount.

And, after all my rambling and opinion, how Schedule I and J are treated are impacted by Local Rules and practices within the different Districts.

[tdawg]

ok. So, for me I have received notice that my separation date is Oct. 31. So, I'm trying to figure out if I need to wait until Nov. 1 for the sake of my Schedule I or if I can file now and either put what my income will be come Nov. 1 or write that in section 17. I have the letter from HR that says I am being laid off effective Oct. 31 that I can bring to the trustee. By the way, I am in Washington state.

[justbroke]

ok. So, for me I have received notice that my separation date is Oct. 31. So, I'm trying to figure out if I need to wait until Nov. 1 for the sake of my Schedule I or if I can file now and either put what my income will be come Nov. 1 or write that in section 17. I have the letter from HR that says I am being laid off effective Oct. 31 that I can bring to the trustee. By the way, I am in Washington state.

Are you over the median income? If so, this is all moot as the Trustee will look to your Form B22A Means Test. Over-the-median income filers are bound by the Means Test. It will not matter that you were laid off, yesterday. In fact, the Means Test doesn't even handle that fact correctly.

What are you really trying to do? Is income an issue for passing the means test? Will you go on unemployment compensation on November 1? Are you filing with an attorney?

[tdawg]

I pass the means test -363 on it left each month. I used the nolo bankruptcy means test. However, I have a high car payment, and I have heard that the trustee will object to that on the schedule I. So, that's the reason for the discrepancy. I guess I am just worried about passing the means test, but then the trustee saying, "Your car payment is too high, so it's not going to be allowed on the schedule I. So, now you have to do a Chapter 13." That would put me in a really bad situation with my future income being lower than my current income. Maybe I'm worrying for no reason? If I'm being laid off is a trustee less likely to make those kinds of objections?

[justbroke]

It's not that they can't deny the car payment. Congress specifically allows it. Now they may want you to reduce it to match the National Standards (to $489), as far as Schedules are concerned. Unless your car payment is over $900/month... I don't see the different hurting you, giving your $-363 disposable income.