chapter 13 convert to 7 maybe

[buckaroo]

would appreciate some advice before contacting old attoreney or new one. filed chapter 13 of advice of attorney back in april 2006. had approximately 50,000 unsecured credit card debt. have been making payments since then and have just sent in my 21st 560.00 payment. i am 73 years old, retired and lving on a retirement of 10000 per year plus social security of approximately 19,000. when filing back in april 06 attorney told me that had to do 13 because of am,ount left after expenses. in calculating income, he took into consideration my social security which from every thing i read, should not have been included, i have no assets whatsoever, did attorney give me bad advice back in 06

[HHM]

Actually, SSN money does get calculated for the purposes of determining disposible income.

But I thought there was a way to "back out" exempt income from the disposible income test...but I am not sure...hopefully someone else can chime in.

In hindsight, given your age and the fact that your income is exempt...unless you had some asset that was at risk of being levied against, there really is no reason to file BK since creditors, even if they sued you, couldn't get anything. Hopefully, you are able to convert to a 7.

[buckaroo]

thanks for response, no had no assets to protect when filing 13

[buckaroo]

form 22c statement of current income, line 9 states do not include any benefits from social security, this is even more confusing to me since my attorney when file 13 in april 2006 included it when determining dispoible income anyone have an opinion on this

[HHM]

Keep in mind, the MEANS TEST (form 22c), and "actual" DISPOSIBLE INCOME TEST (Schedule I and J) are different things.

The MEANS TEST (form 22c) determines whether you "should" have disposable income, as it compares your income to a basket of predetermined expenses, and to your states median income. The primary purpose of the means test is to see if you case, on the surface of it, would qualify for a chapter 7.

Schedule I and J are the charts of you income and actual expenses. Regardless if you pass or fail the means test, you still have to do this part. Under the letter of the new law, even if you pass the means test (i.e. below median income, or based on the income/expense section of Form 22C, you have no disposable income), if, in "real life" you have disposable income of at least $100 per month, they can still put you in a chapter 13. Schedules I and J do not distinguish between exempt and non-exempt income. Chapter 13 merely has you look at ALL sources of income. Thus, even if ALL you income is exempt, if you still have a surplus, you can be put into a chapter 13.

At least, that is my understanding, anyway.