means test

[gunsmoke]

if you take the means test and it shows that you can file chapter 7, does it mean that you can not be forced into chapter 13.

[hhou812hh]

if you take the means test and it shows that you can file chapter 7, does it mean that you can not be forced into chapter 13.

It "should" be the case, but no one has any experience with it so it's hard to answer. Someone's expenses may be below the IRS allowed expenses but live at home rent free with parents and have several hundred dollars a month disposable income so it's not known if it's strictly IRS expenses or actual expenses. I read in a couple of places that it's strictly based on IRS expenses plus some actual addional expenses such as health insurance, home security system, private schooling, etc.

IRS based expenses will prevent someone from driving a BMW and living in a luxury home on the backs of unsecured creditors. Those people will have to move and sell the car to now file for bk which doesn't bother me one bit.

Do be carefull though. When you read those threads with people's 341 experiences and see how many people always forget some document this will be grounds for your case to be dismissed. No exceptions except for Katrina victims or similar.

[StaciMM]

The IRS standards are maximums, you cannot claim more than you actually spend. This will keep people from claiming $300 cable bills, $250 cell phone bills, $900 car payments, etc. Some things will be counted at actual: student loans, day care, medical/insurance to name a few.

The main areas that have limits are housing/utilities, living expenses (groceries, clothing, household supplies, personal care), and transportation expenses. There is a small 'misc' under living expenses, and transportation will be depend on how many vehicles you have and where in the country you live. (There is a transportation expense also for people w/ no car.)

It is possible to be below your state's median, and still have disposable income. Its also possible that your 'allowed' expenses would be more than your take home, yet your 'actual' show room for disposable income to repay your creditors in part.

There is no "Guaranteed" eligibility for BK...

[hhou812hh]

The IRS standards are maximums, you cannot claim more than you actually spend. This will keep people from claiming $300 cable bills, $250 cell phone bills, $900 car payments, etc. Some things will be counted at actual: student loans, day care, medical/insurance to name a few.

The main areas that have limits are housing/utilities, living expenses (groceries, clothing, household supplies, personal care), and transportation expenses. There is a small 'misc' under living expenses, and transportation will be depend on how many vehicles you have and where in the country you live. (There is a transportation expense also for people w/ no car.)

It is possible to be below your state's median, and still have disposable income. Its also possible that your 'allowed' expenses would be more than your take home, yet your 'actual' show room for disposable income to repay your creditors in part.

There is no "Guaranteed" eligibility for BK...

From all my readings someone should have no problems qualifying for a ch7 (providing there's no fraud of any kind involved) if your income is below the states median.

3 days into the new law it's safe to say that most of us, even high priced lawyers are pretty much guessing at a lot of this. We'll have a better understanding of it in about 6 months when new law filers share their experiences on this forum. I'd hate to be one of the first that files under this new law. Usually people learn from other's experiences including lawyers, but no one has any experience yet.

It will be interesting to see what happens.

[StaciMM]

You would still need to have no income available to repay creditors in a 13. (You can be below the median & have income available and therefore not do a 7.)

I agree that being the first in the new/current might not be a good thing! My thought is that for someone planning to file, unless they have a major need to do it NOW (such as foreclosure pending, repossession, etc.) then it would be best to wait. Consulting w/ an attorney right now-when they're still finishing up the last of the old cases and learning the new material-might not be so great. Perhaps 2-3 months down the road, when things settle, would be better to start.

From all my readings someone should have no problems qualifying for a ch7 (providing there's no fraud of any kind involved) if your income is below the states median.

3 days into the new law it's safe to say that most of us, even high priced lawyers are pretty much guessing at a lot of this. We'll have a better understanding of it in about 6 months when new law filers share their experiences on this forum. I'd hate to be one of the first that files under this new law. Usually people learn from other's experiences including lawyers, but no one has any experience yet.

It will be interesting to see what happens.

[gunsmoke]

means test

I am over medium income but only used irs and census numbers from gov main site http://www.usdoj.gov/ust/bapcpa/meanstesting.htm and it stills shows that I can take chapter 7. I was just wondering if the trustee can just say "tough, I think you can handle a chapter 13" and deny my 7. I'm not planning on fileing several months. I don't mind the credit card and collectors calling. I live alone and basically live a boring life. thanks for info and opinions.

[StaciMM]

http://www.usdoj.gov/ust/bapcpa/meanstesting.htm

This site has links to the state median income list, the housing/utilities allowances, vehicle expense, and living expenses.

I think it will be hardest for single people w/ no dependents and couples where both work and no kids. (Larger families are allowed more expenses while their incomes are not drastically more than people w/ no kids.)

NJ has a median for a family of 1 of $52,493. Allowed living expenses $691, the average utilty & housing allowance is $1540. (I'm assuming it is more expensive to live there, as my county in GA is in the more expensive half of the state and allows $1679 living/housing for a family of 5, so a NJ person with an income of $52,000 per year really doesn't have more money than a GA person with an incom of $36,000 per year.) Vehicle operating $298, car payment up to $475. If someone earned $52,000, had 75% of their pay as net income, and had no student loans or medical expenses, they'd have nearly $250/mo to pay into a 13 for 5 years. (More if their real exenses didn't use 100% of the allowance.

[StaciMM]

Someone will correct me if I'm wrong, but I thought if you were over the median, then a presumption of fraud (maybe not the right term) attaches and you're only considered for a 13 unless you have a really unusual situation.

I am over medium income but only used irs and census numbers from gov main site http://www.usdoj.gov/ust/bapcpa/meanstesting.htm and it stills shows that I can take chapter 7. I was just wondering if the trustee can just say "tough, I think you can handle a chapter 13" and deny my 7. I'm not planning on fileing several months. I don't mind the credit card and collectors calling. I live alone and basically live a boring life. thanks for info and opinions.

[hhou812hh]

I am over medium income but only used irs and census numbers from gov main site http://www.usdoj.gov/ust/bapcpa/meanstesting.htm and it stills shows that I can take chapter 7. I was just wondering if the trustee can just say "tough, I think you can handle a chapter 13" and deny my 7. I'm not planning on fileing several months. I don't mind the credit card and collectors calling. I live alone and basically live a boring life. thanks for info and opinions.

I can't imagine them doing that. As long as you did the math correctly you should be fine.

The US Trustee used to base his or her opinion on these standards and file a motion under 707 (b) to dismiss or convert a case but the means test freed them up and placed the burdon on you. If you don't have it you can file a 7.

[gunsmoke]

over medium

even if you are over medium you can still make more calculations to see if you can go chapter 7. http://www.bankruptcyaction.com/bankreform.htm

[StaciMM]

I see what you mean-wasn't aware but its good to know.

If you're over the median, but your income less allowed (or actual, whichever is less) expenses is fairly insignificant, you may still be able to file ch. 7.