This option is good for situations when clients receive inconsistent pay and it eliminates the need to enter all pay advices received during the last full 6 months.
Which pay advice to use for "First Pay Advice YTD": Use the pay advice received immediately preceding the start of the 6-month window. Its YTD figure already reflects everything earned before the window begins, so subtracting it from the last pay advice's YTD figure gives you exactly the income earned during the 6-month window.
⚠️ If you don't have a pay advice from immediately before the window and instead use the first paycheck received within the window, you must subtract that period's own gross pay from the YTD figure before entering it. Otherwise, that period's income gets excluded from the Means Test calculation entirely, understating the debtor's average monthly income.
Example of the error this causes: a debtor is paid $2,000 gross biweekly. Their first paycheck within the 6-month window shows YTD earnings of $10,000 (5 prior paychecks in the year, including this one). Their last paycheck of the window shows YTD earnings of $36,000.
Incorrect: $36,000 − $10,000 = $26,000 ÷ 6 = $4,333.33/month. This excludes the $2,000 earned in that first pay period, understating income.
Correct: subtract that period's $2,000 gross from the First Pay Advice YTD before entering it: $10,000 − $2,000 = $8,000. Then $36,000 − $8,000 = $28,000 ÷ 6 = $4,666.67/month.
*Note: If the debtor is filing between February and June, you will also need to enter the last pay advice received at the end of the year.
Means Test: NextChapter will subtract the first and last pay advices to determine how much income was received from the last full 6 months to determine the monthly average income for the Means Test.
Suggested Pay Advice Dates: NextChapter will suggest the pay advice dates based on when you are filing the case. In this example, you are filing in February 2020. You will need income from August 2019 - January 2020. By entering in the dates next to the pay advices, you will be able to remember the dates and amounts used if you need to return to this case months from now.
⚠️ Note on the suggested dates: the suggested "first" date may fall on the first paycheck within the window rather than the one immediately before it. Always check which one you're entering, and back out that period's gross pay per the instructions above if needed.
Schedule I: NextChapter will use the full pay advice entered in this section for Schedule I.
Example: Debtor is paid twice monthly and there is YTD Income and one Pay Advice entered. The calculations for this specific example would be calculated as follows:
Means Test: $33,000 - $1,000 / 6 months = $5,333.33 per month
Schedule I: $2,125 X 24 pay periods / 12 months = $4,250 per month
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