My income fluctuates because it’s seasonal. How do you calculate my income for bankruptcy?

  • Today In court I was at 341 Meetings for Chapter 13 cases, meeting with Kevin R. Anderson, the Chapter 13 Trustee for the State of Utah.  My client works construction, which means that his income is great in the summer, but the moment snow starts falling, his hours drop to almost nothing.

    The trustee asked my client about his income, and we had to explain that our income is seasonal, and we’ve used averages.  In bankruptcy, we base your income (for purposes of the Form 22 means test) on your last six months of income.  This way, even if your income fluctuates, we get a pretty accurate number.

    Unfortunately, if your income is great in the summer, then the last six months of income will appear too high when we file in November.  It takes some work to prove this.  The trustee is fairly reasonable to work with, and we were able to show that income is already dropping, making our chapter 13 plan a lot more manageable.  If we couldn’t prove that income was dropping, then my poor client would have to pay more money into his chapter 13 plan.

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