2nd Attorney--Apparently, I am not getting it...

OK, so I met with my 2nd attorney today. Good news-I really like the guy, one of the nicest people I have met. Bad news-I still make too much money to file.

It was my understanding that the means test was used when your gross income exceeded the median income for your state. The test would factor in things like taxes, health insurance premiums and a standard automatic deduction to see if your income is truly over.

I am being told now, for the 2nd time that if your gross income exceeds the median income then you mist file a Chapter 13. The means test is then used to determine your disposable income for a Chapter 13 payment. If your disposable income is negative, as is my case, then you are stuck.

Is this accurate? I am apparently not getting this at all. All I know is that I make $42,840.00 salary at my primary job. And I am on track to make $5,007at my 2nd job at the pace I am going. These total $47,847 and the median income for Illinois is $47,355.

I appreciate your input.

Can you just quit your second job and wait a few months to file?

and that does sound odd about the means test. not what my impression has been at all.

Unfortunately, I need the 2nd job for the next 18 months, even if I do file. So I cannot quit it. I just don't get how they can tell me I cannot file bankruptcy. "You make too much money to file a Ch 7 and you don't make enough money to file a Ch 13" WTF am I supposed to do then????

Can you just quit your second job and wait a few months to file?

I am being told now, for the 2nd time that if your gross income exceeds the median income then you mist file a Chapter 13... Is this accurate? Not totally. Generally, an over-the-median income debtor will find trouble in getting a discharge. However, it's done every single day by many debtors. The attorney consulted with probably ran your number quickly and decided that there's just not enough there to get into a Chapter 7 without a fight, and still no guarantees.

Try looking for a lawyer who only does Chapter 7. If you go to the mills or firms which deal primarily with Chapter 13... everything will look like a Chapter 13 to them. (Just a general observation.)

I am apparently not getting this at all. All I know is that I make $42,840.00 salary at my primary job. And I am on track to make $5,007at my 2nd job at the pace I am going. These total $47,847 and the median income for Illinois is $47,355.With you being soooo close to the median (by mere dollars), methinks you have been talking to "Chapter 13" lawyers.

However, I don't know or understand your debt. If you have no major secured debt (house/mortgage, cars), then the attorney you consulted with may be seeing the "other" aspect of Chapter 7. Even if you are below median, doesn't mean you are automatically in a Chapter 7. The lawyers and the Trustee will look to your actual expenses on Schedule J. If Schedule I income less Schedule J expenses yields a number of $100+, your case is considered an abuse, and you're dismissed or pushed to a Chpater 13.

I'm wondering what your expenses were when you consulted.

He won't even run my numbers for a 13. He does not want me to do a 13 since I am so close. I do have a home (1st and 2nd mtg) and car that I will be reaffirming. I am filing soley on credit card debt that is all current.

Not totally. Generally, an over-the-median income debtor will find trouble in getting a discharge. However, it's done every single day by many debtors. The attorney consulted with probably ran your number quickly and decided that there's just not enough there to get into a Chapter 7 without a fight, and still no guarantees.

Try looking for a lawyer who only does Chapter 7. If you go to the mills or firms which deal primarily with Chapter 13... everything will look like a Chapter 13 to them. (Just a general observation.)

With you being soooo close to the median (by mere dollars), methinks you have been talking to "Chapter 13" lawyers.

However, I don't know or understand your debt. If you have no major secured debt (house/mortgage, cars), then the attorney you consulted with may be seeing the "other" aspect of Chapter 7. Even if you are below median, doesn't mean you are automatically in a Chapter 7. The lawyers and the Trustee will look to your actual expenses on Schedule J. If Schedule I income less Schedule J expenses yields a number of $100+, your case is considered an abuse, and you're dismissed or pushed to a Chpater 13.

I'm wondering what your expenses were when you consulted.

He won't even run my numbers for a 13. He does not want me to do a 13 since I am so close. I do have a home (1st and 2nd mtg) and car that I will be reaffirming. I am filing soley on credit card debt that is all current.Strange... won't run the numbers for a Chapter 13, but won't let you file Chapter 7 either. :) Now I'm confused. The fact of being over the median has nothing to do with being able to file a Chapter 7. The Means Test... which being over the median forces your to take... is what determines whether your filing is an abuse. (Okay, there are good faith and totality reasons too, but those are rare.)

I just don't understand. Is he waiting for some income to "average" or "roll" off your six-month lookback. I just don't get it.

And I got the same story from the last attorney, only I like this one 10,000 times better. I will post my means test results in the following reply. There is nothing that he is waiting to fall off of my income either. Nothing will change there.

Strange... won't run the numbers for a Chapter 13, but won't let you file Chapter 7 either. :) Now I'm confused. The fact of being over the median has nothing to do with being able to file a Chapter 7. The Means Test... which being over the median forces your to take... is what determines whether your filing is an abuse. (Okay, there are good faith and totality reasons too, but those are rare.)

I just don't understand. Is he waiting for some income to "average" or "roll" off your six-month lookback. I just don't get it.

These were my means tests results and that income is overly generous, I was trying to over compensate...

Monthly Income: $4,100

Automatic Deductions: $2,547
Other Deductions (Health & Dental Ins): $104
Deduction for Secured Debt: $1,613
Total Deductions: $4,264

Monthly Disposable Income: -$164 (or -$9,821 over 5 years)

What's in the "automatic deductions". Break it down by income taxes, union fees/dues, contributions to retirement plans, retirement plan loan paybacks, etc.

That number seems to large. :)

That number ($2,547) is broken down:

Food, clothing, household supplies, personal care, misc (National Standards)$517
National Standards Health Care $60
Housing and utilities IRS Standards (local) $438
Vehicle Operation Expense (Natioan Standards) $183
Montly Taxes (other necessary expenses) $960

Actual total is $2,158 I think I see a prob with vehicle cost calculation...stand by please :)


What's in the "automatic deductions". Break it down by income taxes, union fees/dues, contributions to retirement plans, retirement plan loan paybacks, etc.

That number seems to large. :)

That number ($2,547) is broken down:

Food, clothing, household supplies, personal care, misc (National Standards)$517
National Standards Health Care $60
Housing and utilities IRS Standards (local) $438
Vehicle Operation Expense (Natioan Standards) $183
Montly Taxes (other necessary expenses) $960

Actual total is $2,158 I think I see a prob with vehicle cost calculation...stand by please :)Do you generally get a tax refund annually as well? What is that usually?

(The missing $489 is the allowance you get for a vehicle that is encumbered by a loan. So, that's what you missed above.)

I am filing soley on credit card debt that is all current.

This may be the problem. You can't count payments to debts that you'll discharge as an expense.
These payments may well be enough dispsoable income to keep you from filing a Chapter 7.

On the NOLO means test, I entered my 2nd mortgage on one of the vehicle payment lines as I am reaffirming it and wanted to include it, however it messed up the vehicle allowance portion.

I re-did the means test and combined my 1st and 2nd payment so that it would not be in the wrong spot. I know have a monthly disposable income of $198 and that puts me in a Chapter 13.

I apologize, this was a clerical error on my part, but at least I see that now. So he wants me to wait and see what Illinois' new median income figure will be this October...he thinks I may squeeze in under that amount...

Do you generally get a tax refund annually as well? What is that usually?

(The missing $489 is the allowance you get for a vehicle that is encumbered by a loan. So, that's what you missed above.)

I do get a tax refund annually. It is around $2,200. Do you see this as a problem?

Do you generally get a tax refund annually as well? What is that usually?

(The missing $489 is the allowance you get for a vehicle that is encumbered by a loan. So, that's what you missed above.)

I'm just double checking what you wrote above. You have $4,100/month in income which means $49,200 a year. With those debts (if the secured payments are really $1,613 and that includes the car and home only), I don't know what's wrong with filing.

Looking at this, with $49,200/year you have a disposable income of $225 (positive). That's a Chapter 13.

If I use the $47,847/year number, you have a disposable income of $112 (positive). That's a presumption of abuse... maybe a Chapter 13.

I think the key is... how much did you actually earn in December 2008, and January-May 2009. Then divide that by 6 and that's your number for the means test (for your current monthly income calculation). I'm wondering if that's higher than $3988/month and is what's pushing you into the presumption of abuse and Chapter 13 area.

He calculated my monthly income to be $4,021 since the 1st of the year.

$4,021 - $2,078 (IRS Standards) - $110 (Healthcare) - $1,614 (Debt Payment) = $219 (Disposable Income)

That is the closest I can get the numbers to be my real figures (paperwork strewn about the desk).

That means my annual income is $48,252 which is over the IL median by $897.

I'm just double checking what you wrote above. You have $4,100/month in income which means $49,200 a year. With those debts (if the secured payments are really $1,613 and that includes the car and home only), I don't know what's wrong with filing.

Looking at this, with $49,200/year you have a disposable income of $225 (positive). That's a Chapter 13.

If I use the $47,847/year number, you have a disposable income of $112 (positive). That's a presumption of abuse... maybe a Chapter 13.

I think the key is... how much did you actually earn in December 2008, and January-May 2009. Then divide that by 6 and that's your number for the means test (for your current monthly income calculation). I'm wondering if that's higher than $3988/month and is what's pushing you into the presumption of abuse and Chapter 13 area.

He calculated my monthly income to be $4,021 since the 1st of the year.

$4,021 - $2,078 (IRS Standards) - $110 (Healthcare) - $1,614 (Debt Payment) = $219 (Disposable Income)

That is the closest I can get the numbers to be my real figures (paperwork strewn about the desk).

That means my annual income is $48,252 which is over the IL median by $897.Well. The reason why you're not eligible and/or why you're being pushed to a Chapter 13, is because the calculations show that you could provide a meaningful distribution to your unsecured creditors through a Chapter 13.

Again, your disposable income is the problem, not the fact that you're over the median.

Both attorneys, using the numbers above, are correct. Your numbers just don't work for a Chapter 7 at this time.

Does this mean that even if the median income is raised in October and I am under it, that I still will be pushed to a Chapter 13 because of this disposable income figure?

Well. The reason why you're not eligible and/or why you're being pushed to a Chapter 13, is because the calculations show that you could provide a meaningful distribution to your unsecured creditors through a Chapter 13.

Again, your disposable income is the problem, not the fact that you're over the median.

Both attorneys, using the numbers above, are correct. Your numbers just don't work for a Chapter 7 at this time.

Does this mean that even if the median income is raised in October and I am under it, that I still will be pushed to a Chapter 13 because of this disposable income figure?Whether you qualify for a Chapter 7 is always based on your disposable income. The only thing the Means Test does is try to push more (over the median income) debtors into Chapter 13s and not allow them to abuse the Chapter 7 process.

So, even if the median income is raised, you just have too much disposable income (not enough secured debt payments).

It's worth repeating that being under the median does not guarantee that you can file Chapter 7. It just means that you don't have to use the convoluted Means Test to calculate your "disposable income". Being able to get a discharge in a Chapter 7 is always predicated on whether you have the "means" to pay your unsecured creditors some dividends through a Chapter 13.

Means test aside, it always comes down to your disposable income.

Ok, so can you answer this?

Out of my $219 disposable income, do they take the whole amount every month in a CH 13?

And what determines whether you pay for 3 years or 5 years?

And is my disposable income actually $219 since it was done through the means test or is it something else that they decide through another equation?

You have been awesome with your answers!

Whether you qualify for a Chapter 7 is always based on your disposable income. The only thing the Means Test does is try to push more (over the median income) debtors into Chapter 13s and not allow them to abuse the Chapter 7 process.

So, even if the median income is raised, you just have too much disposable income (not enough secured debt payments).

It's worth repeating that being under the median does not guarantee that you can file Chapter 7. It just means that you don't have to use the convoluted Means Test to calculate your "disposable income". Being able to get a discharge in a Chapter 7 is always predicated on whether you have the "means" to pay your unsecured creditors some dividends through a Chapter 13.

Means test aside, it always comes down to your disposable income.

Out of my $219 disposable income, do they take the whole amount every month in a CH 13? It would be the $219 unless you could prove that your "projected" disposable income is less (or they prove that it's more). Think of the $219 as a good starting point of what your "disposable monthly income" (DMI) should be in your Chapter 13.

And what determines whether you pay for 3 years or 5 years? Being under or over the median, respectively. So, that's 3 years if you're under the median, and 5 years if you're over the median for your family size in your State.

And is my disposable income actually $219 since it was done through the means test or is it something else that they decide through another equation?They can also look to your Schedule I and Schedule J. Although this is disputed in most Districts, Trustees still look at your Schedule J expenses to compare to the "Means Test" expenses on your means test.

You have been awesome with your answers!Thanks, but I did bounce you around a little. :) So, thank you for your patience.

OK, I know you are going to kill me, but...

1) If they take the $219 then I am screwed. My utilities cost more than the $483 they allow for and I can only count $100 monthly payments on my 2nd mortgage as it will be paid off in 18 months. But, for the next 18 months I really have a $335 payment on that... do they just not care about these things?

2) I just realized while reviewing my stubs that I have a total of $670 in bonuses that were paid to me this year, but were earned last year from my primary job. I am no longer in a sales position, so I will not receive bonuses in 2009. This would be why my income is slightly inflated. If I leave my 2nd job income as he calculated it and calculated my 1st job income on strictly the salary amount I get, then my monthly income is actually $3947 which makes my disposable income $145.

Your thoughts on these 2 points?

It would be the $219 unless you could prove that your "projected" disposable income is less (or they prove that it's more). Think of the $219 as a good starting point of what your "disposable monthly income" (DMI) should be in your Chapter 13.

Being under or over the median, respectively. So, that's 3 years if you're under the median, and 5 years if you're over the median for your family size in your State.

They can also look to your Schedule I and Schedule J. Although this is disputed in most Districts, Trustees still look at your Schedule J expenses to compare to the "Means Test" expenses on your means test.

Thanks, but I did bounce you around a little. :) So, thank you for your patience.

1) If they take the $219 then I am screwed. My utilities cost more than the $483 they allow for and I can only count $100 monthly payments on my 2nd mortgage as it will be paid off in 18 months. But, for the next 18 months I really have a $335 payment on that... do they just not care about these things?Aha, they do care about these things. There are some specific things you can do where energy costs exceed the allowance. You need to have receipts. So you would use actual energy costs.

2) I just realized while reviewing my stubs that I have a total of $670 in bonuses that were paid to me this year, but were earned last year from my primary job. I am no longer in a sales position, so I will not receive bonuses in 2009. This would be why my income is slightly inflated. If I leave my 2nd job income as he calculated it and calculated my 1st job income on strictly the salary amount I get, then my monthly income is actually $3947 which makes my disposable income $145.Doesn't matter when they are earned. It matters when they are paid (received as income).

The Means Test is just what it implies... it's MEAN! It doesn't care about your "current" condition... it only looks at the last 6 months. :)

I think that if your Chapter 7 attorney wants to work with you, then you may be able to fight... but it will be a fight. The US Trustee will certainly look at this (over median) case and will want documentation. If you can get your disposable monthly income below $100, there's a chance you can actually get a discharge in a Chapter 7.

Maybe ask the attorney about your actual fuel costs! But be cautious. If the absurd, I mean... above average fuel costs are caused by running large 50" Plasma TVs and careless use of electricity, or just driving your car around for fun... the UST will say that you need to change your lifestyle. (Seriously, they say stuff like that.)

I would go to one of the chapter 7 trustees that are also attorneys in your area. Many of them have a thriving Bankruptcy practice. Guess what they are experts in?

I guess the thing that I don't understand is that I keep reading threads on this very site where people are over the median income for their state and they still file a Chapter 7.

I am being told by 2 different attorneys, that if you are over the median income, you cannot file. Regardless of what your expenses are, you must do a 13.

I guess the thing that I don't understand is that I keep reading threads on this very site where people are over the median income for their state and they still file a Chapter 7.Absolutely they do, and they get discharges! There are people who earn $150K or more, with just a family size of 4... that get Chapter 7 discharges! It's all about your disposable income, not whether you're over/under median. Over/Under median really has nothing to do with filing. Being under median just makes it so that you don't have to take the means test. However, not taking the means test, doesn't mean you qualify. So there's no direct correlation between being under the means and guaranteeing that you can receipt a Chapter 7 discharge. It's just more likely, when you're under the median.

I am being told by 2 different attorneys, that if you are over the median income, you cannot file. Regardless of what your expenses are, you must do a 13.Time to shop around some more. I don't know why any attorney would say that. Again, some Chapter 7 attorneys, and particular mills, don't like to get into litigation (fights) with the Trustee, so they don't want to do the cases that take more time and effort. Perhaps these 2 are just lazy. LOL

Thank you for reaffirming (no pun intended) that point. I brought in my printed out means test and he didn't even look at that. Now, I did make a mistake on my means test and it turns out that I do have $219 of disposable income per the means test. However, I am sure that on a Sched J, I will have higher expenses that will make that number negative. If you fail the means test, does Sched J even matter? I got the impression from you that if you fail the means test, then its a 13 regardless.

Absolutely they do, and they get discharges! There are people who earn $150K or more, with just a family size of 4... that get Chapter 7 discharges! It's all about your disposable income, not whether you're over/under median. Over/Under median really has nothing to do with filing. Being under median just makes it so that you don't have to take the means test. However, not taking the means test, doesn't mean you qualify. So there's no direct correlation between being under the means and guaranteeing that you can receipt a Chapter 7 discharge. It's just more likely, when you're under the median.

Time to shop around some more. I don't know why any attorney would say that. Again, some Chapter 7 attorneys, and particular mills, don't like to get into litigation (fights) with the Trustee, so they don't want to do the cases that take more time and effort. Perhaps these 2 are just lazy. LOL

As much as I hate to say it you could also go buy another car. That would allow you to take the additional up to $489 a month IRS allowance, thereby reducing your disposable income. It's part of the strategy a good lawyer would suggest.

What the hell do I do with the car after I buy it then? Lol. The shitty thing here is that if I file a Chapter 7, I still have a $909 1st mtg, $335 2nd mtg and $502 car payment to make. After those bills are paid and all of my utilities (electric, gas, water, satellite, garbage, home phone, cell phone, internet, etc..) I will have $500 left to spend on gas, food and whatever else. I drive 90 miles to and from work, so at least $150-$200 a month in gas for that is needed.

Now, in 18 months the 2nd will be paid off. That means that I will have $335 more per month, but I want to quit the 2nd job then which will about break even.

So, the frustrating part of all of this, for me, is that even after a CH 7 I am not going to be rolling in the cash and this is totally not me abusing the system...

As much as I hate to say it you could also go buy another car. That would allow you to take the additional up to $489 a month IRS allowance, thereby reducing your disposable income. It's part of the strategy a good lawyer would suggest.

What the hell do I do with the car after I buy it then? Lol. The shitty thing here is that if I file a Chapter 7, I still have a $909 1st mtg, $335 2nd mtg and $502 car payment to make. After those bills are paid and all of my utilities (electric, gas, water, satellite, garbage, home phone, cell phone, internet, etc..) I will have $500 left to spend on gas, food and whatever else. I drive 90 miles to and from work, so at least $150-$200 a month in gas for that is needed.

Now, in 18 months the 2nd will be paid off. That means that I will have $335 more per month, but I want to quit the 2nd job then which will about break even.

So, the frustrating part of all of this, for me, is that even after a CH 7 I am not going to be rolling in the cash and this is totally not me abusing the system...

I grieve with you........thats exactly what I told the attorney but it's part of the strategy unfortunatly. And i see something else you just disclosed that your att did not tell you. that extra $335 a month you think you will save after 18 months, the trustee will want that savings to go into your Ch-13 plan to pay your unsecured creditors if you go into a 5 year plan. that is why you need to buy a car.....or find additional expenses to keep you out of a Ch-13. I know it's crappy, but thats how it works.

Well I really don't want to do a 13, just because my $500 will be dropped to $300 which means that after gas, I will have $100 left for food, groceries, entertainment, prescriptions, savings for emergencies, haircuts, pet food, vet bills, clothes, toiletries, household items, cleaning supplies, contacts/glasses, etc...

How can they expect that to work????


I grieve with you........thats exactly what I told the attorney but it's part of the strategy unfortunatly. And i see something else you just disclosed that your att did not tell you. that extra $335 a month you think you will save after 18 months, the trustee will want that savings to go into your Ch-13 plan to pay your unsecured creditors if you go into a 5 year plan. that is why you need to buy a car.....or find additional expenses to keep you out of a Ch-13. I know it's crappy, but thats how it works.

Well I really don't want to do a 13, just because my $500 will be dropped to $300 which means that after gas, I will have $100 left for food, groceries, entertainment, prescriptions, savings for emergencies, haircuts, pet food, vet bills, clothes, toiletries, household items, cleaning supplies, contacts/glasses, etc...

How can they expect that to work????


You really got to find the right attourney. Look for one who does bk only and has many years experience then weed through them from there.