Question: I filed for bankruptcy in April 09 and reported my family income to include 3 people in the household (2 kids and myself). At the time of filing, I did not receive any child support due to my ex refusing to pay such support. In May, the court ruled that my ex will have to pay me the child support, and back dated this support to a year ago when we separated. So, since May, my ex is paying child support ($140 per month), but is doubling up on this amount ($280), to catch up on the previous years’ lack of payments. This extra $280 dollars per month has now pushed me over the limit of income for 3 people, and a week ago, I received a letter from my bankruptcy trustees, saying they cannot discharge me, for my income exceeded the maximum level and that I now owe them an extra ~$1500 before they will discharge me.
It is thus clearly that the child support I started receiving in May, has caused the “inflated” surplus income. 1) As I provided my monthly income/expenses to the trustees, could they not point this issue out to me, requiring me to pay more on a monthly basis, 2) as half of this money is “arrears” payments, is this not a bit unfair .. I supported my children for a year without child support, and now that the court had ruled for me to receive the payments, I am penalized by the trustee?
What can I do .. I really do think this is unfair for I just do not have the $1500 they now claim from me in order to discharge me.
Please help!
Thank you
Answer: All trustees are required to tabulate your income each month, and if you are over the limit you are required to pay half of that amount each month as surplus income. Your trustee should have performed this calculation each month, and they should have informed you each month of the amount owing. If they did, it would have been easier to make the payments each month. It appears that they didn’t tell you what was owing until your bankruptcy was almost over, by which time you have significant arrears.
You have a few choices.
First, talk to your trustee and ask them if there is any way to make payment arrangements. Have they charged you fees in addition to your surplus income payments (most trustees do), and can they reduce those fees to allow you to catch up?
Second, you could request mediation, where a representative of the Office of the Superintendent of Bankruptcy and your trustee will meet with you to review the surplus income calculation, and explore alternatives.
Finally, you can request that your trustee schedule a discharge hearing in bankruptcy court. This will give you an opportunity to appear in court and explain your side of the matter to the bankruptcy judge; the judge has the power to change the amount owing, or to give you payment terms to complete the payments.
The lesson here is that if you are filing bankruptcy, you should ask your trustee up front how they will communicate your surplus income obligations. Good trustees will do the calculation every month, and inform you of the amount owing each month, so you don’t fall into arrears.