Question about Chapter 7 and disposable income.

[Needhelp1]

We have decided to file for a chapter 7, I am well below our states median income for our family size (roughly 30,000) below. I am showing that after expenses I will have somewhere between 150 - 200 left over at our current living expenses. Could this somehow get converted to a chapter 13 even though I am well below the median income?

[optimistic1]

It certainly would. You need to increase your expenses, but not to the point where it exceeds the allowable IRS standards. Trustee's have been looking at filers expense schedule J as well to determine if they can file a 7. It is doubtful that if you dont exceed the IRS allowances, and you simply overstated the amount of money you spend on food, gas, clothing, etc, that most likely, the trustee would not check, this doesnt mean I am telling you to cheat. But the new law in my eyes states, if you are under median, you pass the means, and you should be able to file regardless of Schedule J, but the Trustees appear to be sticking it to consumers.

Ask yourself this.

Where is my bailout? Oh thats right, you dont get one.

[mindy0795]

We went to an attorney back in November to file Chapter 7 and he said we were well below the median income for our family size of 4 and state (PA), but when we got to his office he said our disposable income was over $150.00 so we would have to file a chapter 13, I then went over the schedule J and looked at the expenses he had put down. I noticed on the food expense he listed $400, which I wish that is all we spend each month. I told him along with paper products and personal hygiene it was more like $700.00 a month which is below the standards, he stated that it doesn't matter what the standards are the trustee has his own amounts by looking at previous filers. He told me to keep all receipts to prove this is what we spend a month.

[okiebk09]

i would get a second opinion.

[lrprn]

We have decided to file for a chapter 7, I am well below our states median income for our family size (roughly 30,000) below. I am showing that after expenses I will have somewhere between 150 - 200 left over at our current living expenses. Could this somehow get converted to a chapter 13 even though I am well below the median income?

Until an experienced bk lawyer (or if you are a very well informed lay person who has researched bk deeply) places your figures into the mandatory Means Test using the government-mandated figures for housing and transportation as well as your documented living expenses and other asset payments, you won't know if you have disposable income or not. Even if the initial Means Test shows disposable income, you still have the opportunity to use the Schedules to get yourselves at $0 or below disposable income that way.

How did you arrive at $150-200 disposable income a month?

[Needhelp1]

Until an experienced bk lawyer (or if you are a very well informed lay person who has researched bk deeply) places your figures into the mandatory Means Test using the government-mandated figures for housing and transportation as well as your documented living expenses and other asset payments, you won't know if you have disposable income or not. Even if the initial Means Test shows disposable income, you still have the opportunity to use the Schedules to get yourselves at $0 or below disposable income that way.

How did you arrive at $150-200 disposable income a month?

This is what we are currently spending on food, utilities and current expenses. However we have been scraping by on the food and such since we had been trying to pay the creditors untill we decided to file. Now that we have decided to file and met with an attorney (who has said he thinks a Chapter 7 is not a problem) Some of our debts are from a failed business, so I think that changes things a little bit also. Well mostly are from a failed business but were put on a personal C.C. instead of one in the businesses name. That happens a lot to small startup businesses

[Confused78]

I too past the means test but somehow had dispoasble income. The stupid lawyer filed my return with the extra income and I didn;t know any better at the time. I went to my 341 and was told that my case was about to be thrown out. So we continued, I went back to my law. office and we refigured the costs I have monthly. We are now under and I go back for my 341 on Monday. Hopefully I won't have any trouble since the first time we messed up. My att. is an ass!