Variable Income question

[Greg0538]

In any payback plan, how would the monthly payment be calculated if my income is never the same from month to month.

Also it may not be the same from year to year. I may not work as much overtime.

Thanks

[HHM]

There are many ways to approach this challenge.

For simplicity of the plan, the payments are generally the same every month. You have to FIX the amount of the monthly payment in your payment plan. If the variableness of your income is solely due to overtime, you just take your base income and use that in determining the plan. If the trustee objects, then you take an average of your yearly overtime and divide by 12.

For example, lets assume your base salary is $48,000. That is $4,000 per month gross, and lets say your taxes and expenses are $3,800. Thus you would pay $200 per month for 36 months into the chapter 13 plan. Now, lets assume that you work significant and consistant overtime that is well documented on tax returns and paystubs and that your overtime average is $6000 per year. Divide the $6000 by 12, getting $500 per month. If the trustee presses the issue, you might have to devote and additional $300-400 per month to your plan.

But do first, prepare your schedules only using your base, full-time salary.

[Greg0538]

Thanks for Info and another ?

HHM

Thanks for the Info. I'm just trying to get as much info. as I can prior to obtaining a lawyer.

As a side question, what is the advantage/disadvantage of Ch13. I am not really attached to any belongings beside my house. Would Ch7 be a better option?

[HHM]

You don't necessarily get to choose between 7 or 13, when you meet with your attorney he can explain the difference. If you have disposable income (i.e. income in excess of your reasonable necessary living expenses), you will have no choice but to file a Chapter 13.

If your current on your house payment, then assuming you otherwise qualify for a Chapter 7, a chapter 7 is preferable.

[Greg0538]

HHM
Again, thanks for info.

I will have disposable income but I do have 1 more ?....or maybe 1000!

How are unexpected expenses dealt with in the repayment plan. For example, our furnace is 27 years old and will probably just make through another Pittsburgh winter. A new furnace is $4000 expense. Or what if me or my wife incurred unexpected health costs.

Thainnks again

[HHM]

There are mechanisms to defer plan payments or even seek a hardship discharge once you are into your plan.

The first thing you need to do is get a confirmed plan.

[WithoutAPaddle]

Variable Income

I am currently a commission only sales person having started my job in January. Since then, I have been filling the pipeline with potential sales, but to date, I have earned only $1,200 since January.

How do I explain my income?

What happens between filing and final discharge if my income goes up? :o What if it goes up significantly?