6 month look back ??

[Freddy03]

I just ran our numbers again - and I'm confused on something.

Both our pays are the same (give or take a few bucks) each month but in Dec we both got a bonus. Mine is always a Christmas type bonus and my Husband's was not the norm. It's not guaranteed he gets it every year.

Say we were to file Ch 7 tomorrow so would I need to take all our paystubs (including the bonus) and then divide that by 6 to get our monthly income total?

If so that puts us with a +300 DMI if I don't include the bonus we are just about even.

Thanks - I'm having one of my freak out crazy moments....

[heineman78]

Actually, you take the last 6 months, multiply by 2, and divide by 12. Which really sucks.

[free2breathe]

Straight from form B 22A:

"All figures must reflect average monthly income received from all sources, derived during
the six calendar months prior to filing the bankruptcy case, ending on the last day of the
month before the filing. If the amount of monthly income varied during the six months, you
must divide the six-month total by six, and enter the result on the appropriate line."

To get the annualized income for the means test, you then multiply that monthly income number you end up with by 12 and compare it to your state's median. Bonuses really put a crimp in the six-month look back. Especially if they aren't something you can count on each year.

[Freddy03]

Actually, you take the last 6 months, multiply by 2, and divide by 12. Which really sucks.

I still get the same outcome.

I took the means test again with the added bonus and we still passed or I think we passed. I copied this b/c I'm not sure what the Red part means.

Enter the amount from Line 18 (Monthly Income)
$6,950
49 Enter the amount from Line 47 (All Deductions from Income)
$ 6,862
50 Monthly disposable income (Line 48 - Line 49) $ 88
51 60-month disposable income (Line 50) x 60
Amount you could pay in a hypothetical five-year Chapter 13 plan.
$ 5,300
52 Initial presumption determination
IF RESULT
Amount on Line 51 is less than $7,025 Pass Means test
Amount on Line 51 is more than $11,725 Fail Means Test
Amount on Line 51 is more than $7,025 but less than $11,725 Pass IF Line 51 < Line 54
Fail IF Line 51 > Line 54
Because the amount on line 51 is less than $7,025, the presumption of abuse does not arise. You pass the means test. Do not complete the remainder of Part 6

[Freddy03]

Expenses:
Gas (cars)- Montly $325.00
Food/Cleaning/Personal - Monthly $1,200.00
Clothing - Monthly $150.00
Medical - Monthly $75.00
Utilities - Monthly (Electric/Water) $300.00
Cable/internet - Monthly $130.00
Phone (3 cell phones only)- Monthly $150.00
Home - Tax/Ins $250.00
HOA $75.00
Mortgage $1,650.00
HELC - Mortgage $230.00
Car $385.00
Misc - Car/Home Repairs $150.00
Tolls/Parking $100.00
Auto Ins $150.00
Entertainment $100.00
Misc - Pet Care $50.00
School Lunches/supplies $100.00

Total: $5,570.00

Total Take Home Income: $$5731.18

Cutting it kind of close +$161.18

Any suggestions??

Thanks

[debee]

If you get paid biweekly, don't forget to factor in the extra two paychecks per year.

Also, you can end up in a chapter 13 with as little as $117 per month if it is enough to pay 25% of your unsecured.

eta: The red part of your post is saying that your DMI x 60 (for a 5 year plan) equals $5300 which would be what you could pay in a hypothetical ch 13.

[Freddy03]

If you get paid biweekly, don't forget to factor in the extra two paychecks per year.

Also, you can end up in a chapter 13 with as little as $117 per month if it is enough to pay 25% of your unsecured.

I went back the complete six months and we both received 14 checks (including the bonus) then I divided that total by 6. Is that right??

What if I took a few days off (unpaid at work) in Feb?? So my Feb checks are less. Could I do that or is that fraud?

[Freddy03]

Do I have to add any tax refund also? I'm freaking put now!!!

[debee]

Was your bonus check separate? I ask because there's normally 26 checks per year and if you had 14 in the last six months and one of them wasn't the bonus, it would mean you got both extra checks in the same 6 month period. If that's the case, and depending how long you can prolong filing, you may be able to reduce your average income by a paycheck each. That would give you more means test wiggle room.

I don't know about the days off. It doesn't sounds like a good idea because it could be so easily overcome. As for the tax refund, we've seen objections based on over-withholding. How much of a refund is it going to be, Freddy? If you can pass the means test after adding it back in, that would be better.

What's your household size?

[free2breathe]

Breathe Freddy, breathe You're going to get through this fine. Soooo many people with answers to help you out.

If you get paid bi-weekly, then 14 checks would be right. Adding it all up, dividing by 6 gives your average monthly income over that last 6 months. Multiply that number by 12 gives you the number you need to compare to the median for your state.

Did I miss how many in your family? You are allowed $60 per month for medical for each family member under the age of 65. That could bump your expenses up a bit.

eta; was writing while debee was posting. Whether bonus was included in a regular check or issued in a separate check could change the number of check stubs, of course.

[Freddy03]

Thanks guys for helping.

We had 13 pay checks and we both had one bonus so I counted 14 deposits from work. Acutally I think my husband's was broken down into 2 checks (same pay date).

We are a family of 4 and are over the median.

I put the amounts (including the bonus) on the nolo means test and I posted the results. It said we passed. I was concerned what I posted in red was.

I have to file in March (no questions about it) I have been holding off a judgment from garnishment and bank levy now. I'm hoping to file March 7th. This is based on when I can file my taxes and pay my property taxes with the return.

[debee]

I don't know how bonuses play out in FL, but someone posted on a thread here yesterday that their attorney didn't put their bonus in their means test at all. It was mentioned in the bk filing, just not in the means test. In your case, since it's a regular thing there wouldn't be that option, but have you discussed with your soon-to-be attorney about your husband's? Because if he hasn't had one appear on his W2 for the last couple years and if he doesn't normally receive one, you might have some options.

I think your DMI on schedule J is too high. All the trustee needs is $34 and you'll be a chapter 13. If your unsecured debt is low enough, you might be a chapter 13 with the DMI you're showing now.

eta: freddy, the IRS nat'l standard for food, apparel and services, housekeeping supplies and personal care is $1371 for a family of four. Your grocery bill, clothes, and school lunches should total less than $1371 to avoid an objection. You're over by $79.

Check Line 20A of Nolo to find out what your local standard is for home maintenance and repair, HOA, gas, electric, propane, water, heating, cell phone, and telephone. Ours is $614. Everything needs to come in under that amount or again, you risk an objection. If you can't come in under that amount, document.

Line 22A of the means test will tell you the local standard for vehicle operation cost. If you have a car that is paid off and over 6 years old or over 75k miles, you can claim an additional $200 in your district. I would confirm that with an attorney.. Your gas & tolls is high, so make sure you can document. Because it sounds like you have long commutes, I would think you can go over the local standard. You need to have some budget for repairs, tires, oil changes, etc. as well.

Also, as f2b noted already, your medical/dental is low.

Another thing to check is your insurance coverage and deductibles. You may have raised your deductibles and lowered your coverage in order to save money pre-bk, but you should lower deductibles and increase coverage now because post-bk you won't have cc to cover emergencies. And the price will go up and that will help your schedules.

Don't forget your annual vehicle tax. Also, I didn't see health insurance in your budget. I didn't see term life insurance for you and your spouse either.

[free2breathe]

As a family of four, you should be able to list $240 in medical, that will decrease your DMI by $165

[Freddy03]

Thanks Dee -

I'm at home and all my spreadsheets are at work so I'll def look at your advice tomorrow.

The only thing I can think of now is about the gas and tolls. My husband has to pay for mandatory parking per month ($30) and we both drive the toll roads (in FL it's almost impossible to not) and that equals about $60-$70 per month. Gas here is over $3.00 a gallon so if we fill up once a week it's $45 for me and $35 for my husband - give or take depending on the weeks the kids have "specials" at school then it's a little more those weeks.

Our healthcare was already deducted from our take home pay. Forunately my husband's job offers pretty low premiums. We pay about $400 a month for full medical (no deductible), dental and vision.

I saw your comment about the my red post. So does even though the means test says I passed I could still be put into a 13?

Oh my husband's bonus is not guaranteed. He did get one in 2010. I'm pretty sure he won't be getting one for the next 3 years as he is in a pay freeze.

I really appreciate everyone helping me! I really don't want to do a 13 for 5 years if I'm so close. I want this over with ASAP.


Where is CCSJoe to tell me to stop freaking out??....LoL

[Freddy03]

Oh we have about $55K in unsecured debt when I last counted in September.