I just don't understand why the 6 mo. lookback matters if over the median

[topekajack]

I just don't understand why the 6 mo. lookback matters if over the median.

What if in the previous 6 months you were well over the median, then you lost your job. You then had to file quickly to save your home or prevent a judgement. You file for a 7 because you have no way of funding a 13. However, your 6 month lookback shows too much income. So, you are then pushed into a 13. However, it is then clear to everyone that based on current and future income (lets say you have a new job but it pays very little) that you can not fund a 13. Do they then push you back into a 7?

[Faust]

Your atty can argue your case in circumstances like this. Then if the court agrees you can file a 7.

There are always special circumstances.

[kcfaninin]

I just don't understand why the 6 mo. lookback matters if over the median.

What if in the previous 6 months you were well over the median, then you lost your job. You then had to file quickly to save your home or prevent a judgement. You file for a 7 because you have no way of funding a 13. However, your 6 month lookback shows too much income. So, you are then pushed into a 13. However, it is then clear to everyone that based on current and future income (lets say you have a new job but it pays very little) that you can not fund a 13. Do they then push you back into a 7?

Wow, your situation sounds identical to ours. We filed 12/1/09 and we were well over the median income with the 6 month look back. Plus, we failed the means test. I had to quit my part time job due to health reasons and like you, we had to file quickly to avoid a judgement.

We could not afford to fund a Chapter 13 either. Our attorney said, all we needed was a letter from my physician stating my health was in jeapordy if I continued to work the hours I was working.

I also needed a statement from my employer that I resigned my position. We had our 341 on 2/3/10 and the trustee never questioned it.

We did have a creditor show up, but that's in a whole different post!! As long as you have proof that you lost your job, I think you should be fine.

[kornellred]

The 6-month look back period in determining income is the best compromise that lawmakers could come up with to keep filing for bankruptcy from becoming an unmanageable burden for the courts and attorneys. Fact is, the majority of wage earners have a relatively steady income stream, at least among the demographic that WERE most likely to find filing for bankruptcy necessary. (the capitalization of "were" is on purpose)

It's simply part of the ground rules - the departure point. That is why competent legal counsel is vital in virtually all but the simplest, straightforward, no-asset Chapter 7 filings.

I was extremely fortunate in my own Chapter 13 filing. My 6-month look back did not take into account my annual incentive/bonus check, which normally amounts to roughly 10 percent of my base pay. And, as fate would have it, the overtime that I do sometimes get occurs outside the time frame of the look back period (in my case). The result is that my gross income was calculated to be less than it actually is. All justified by the rules, mind you. I had all the documentation to prove my income and expenses.

So it works both ways. I imagine that those of us who have derived benefit from the 6 month income look back period are fewer in number than those who have found themselves at a disadvantage.

[catleg]

Don't kid yourself. The "means test" is the best they could come up with to make more people pay back the banksters without triggering 13th amendment concerns about involuntary servitude.

[kornellred]

catleg - you are pretty much saying the same thing that I said, only with a more cynical overview. The rules are a compromise in any case.