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Orange County, New York Lawyers Discuss Payment Advices in Bankruptcy

In order to properly prepare your Means Test we will need copies of your pay stubs for the previous 7 months, together with proof of any other income received during said 7-month period. As an example, if we do your Information Intake Interview with you in mid-January 2012 to efficiently and properly handle your Means Test we will need your pay stubs (and proof of other income) since mid-June 2011. In addition, prior to the Section 341 Meeting we will have to deliver to your Trustee your pay stubs received during the 60-day period prior to the bankruptcy filing, together with proof of any other income received during said 60-day period. If you are married and living together with your spouse, in order to properly complete the Means Test we will need your spouse’s pay stubs and proof of other income during said 7-month period, even if said spouse is not filing bankruptcy with you.

We will need proof of ALL income received during the 7-month period prior to the Information Intake Interview, including:

  • Pay stubs from your employer evidencing regular earnings
  • Pay stubs from your employer evidencing bonuses and commissions
  • Mileage reimbursement checks received from your employer
  • Statements evidencing pension payments
  • Statements evidencing private disability payments
  • Statements evidencing Social Security payments
  • Statements evidencing withdrawals from IRAs or 401(k) Plans
  • Statements evidencing sales of any stocks or securities
  • Statements evidencing the funds received from cashing out a portion of the Cash Surrender Value of a policy of whole life insurance
  • Statements evidencing any payouts from property or casualty insurance policies
  • Bills of Sale for any assets sold
  • Statements evidencing any inheritances or life insurance payments received
  • Almost any other type of income-producing event that you can imagine

It does not matter if the income received represented a “once in a lifetime” payment that will never occur again. If this one-time payment occurred within 60 days of the bankruptcy filing, proof of the payment will have to be presented to the Trustee, and if the one-time payment was received at any time during the 7 months prior to the Information Intake Interview, it must be included in your Means Test calculation. If this all seems very burdensome and unfair to a struggling debtor, it probably is, and that is what Congress wanted. It was not the “best interest of the debtor” that was the driving force behind the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Congress wanted to make bankruptcy harder and more expensive, and so they did.