Trustee looking closely at your DMI.

[optimistic1]

Before the plan has been confirmed. After the case has been filed, but before the court has entered an order making it binding on creditors (which may take about 6 months), the Trustee will be looking closely at your disposable income and will require that plan payments be consistent with your disposable income.


I found this on my potential lawyers website.


What do they mean by

"the Trustee will be looking closely at your disposable income"

??

How exactly will he/she be doing this?

[HHM]

Basically, the primary task of the chater 13 trustee is to make sure your chapter 13 payment is as high as possible.

By looking closesly, that means they review your expenses. For most people, its a non-issue because the expenses are within accepted norms for the area. But if there is anything out of ordinary, or unreasonably high, the trustee may ask for documentation or other proof of the expense.

[optimistic1]

"because the expenses are wihing accepted norms for the area"

I'm assuming wihing is a typo, what word did you intend to use?

So if my expenses are below what the IRS standards are, then there should not be any thing scrutinize.

[magyar123]

I think the word was to be "WITHIN"

[HHM]

"because the expenses are wihing accepted norms for the area"

I'm assuming wihing is a typo, what word did you intend to use?

So if my expenses are below what the IRS standards are, then there should not be any thing scrutinize.

Correct, if your actual expenses are at or below IRS allowed standards, you should be fine. But make sure you understand all that is included in those standards. The IRS Housing allowance is not simply your rent or mortgage payments, it includes insurance and misc expenses.

[optimistic1]

Correct, if your actual expenses are at or below IRS allowed standards, you should be fine. But make sure you understand all that is included in those standards. The IRS Housing allowance is not simply your rent and mortgage payments, it includes insurance and misc expenses.

If, in Arizona, the current IRS allowance for housing is $1,071 for a three person household.

And my FHA Mortgage, which includes taxes and insurance, is $1167 with no HOA fees are any other fees.

This loan is current and would not be included in the plan.


What would a trustee do in that situation?

[justbroke]

If, in Arizona, the current IRS allowance for housing is $1,071 for a three person household.

And my FHA Mortgage, which includes taxes and insurance, is $1167 with no HOA fees are any other fees.

This loan is current and would not be included in the plan.


What would a trustee do in that situation?

In a Chapter 13, you get to use the actual cost for your housing allowance if it's your primary residence and secured by a mortgage!

Otherwise, I couldn't be living where I live now. The IRS allowance is only like $1,120 for a family of four in this area and my mortgage is WAY WAY more than that (especially with tax and insurance).

ACTUALLY, let me correct that.

In a Chapter 13, you get the difference between the allowance and your actual cost or $0 if it's negative. So $1,167 - $1,071 = -$96.00 (negative ninety-six dollars). So you get a $0.00 allowance.

What happens though, is you get to claim the full amount of the mortgage including taxes and insurance in your secured debt payments section of the means test.

[optimistic1]

Thanks Justbroke, I found that exact same answer by you, that someone else had.

It is a relief.

[sassiebaz]

Where can I get the info on what expenses are allowable, and at what amounts? Also, The way our current situation is, we make over the median income for our state. That will change here in he near future....it's obvious to me we should wait to file, until our income is reduced. Is there a time period that anyone knows about, that we should wait, or a rule of thumb on how this is taken into consideration?

[justbroke]

Where can I get the info on what expenses are allowable, and at what amounts?

You can go the U.S. Trustee's website on the Allowable Limits...

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

Also, The way our current situation is, we make over the median income for our state. That will change here in he near future....it's obvious to me we should wait to file, until our income is reduced. Is there a time period that anyone knows about, that we should wait, or a rule of thumb on how this is taken into consideration?

If you're trying to file Chapter 7 (and this applies if you're stuck in a Chapter 13 too), make distance between when you received any bonuses, commissions. Some companies pay these once a year, so make sure it wasn't in the last 6 months of the lookback for the means test.

[sassiebaz]

You can go the U.S. Trustee's website on the Allowable Limits...

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

If you're trying to file Chapter 7 (and this applies if you're stuck in a Chapter 13 too), make distance between when you received any bonuses, commissions. Some companies pay these once a year, so make sure it wasn't in the last 6 months of the lookback for the means test.

We don't exactly know the bonus structure as this is a new job for my husband however, we think it's quarterly. But they aren't that large. Maybe a grand? But I will not be working for much longer. Maybe 3 months at the most. We will be filing Ch 13. I am meeting with an attorney on Thursday.

[sassiebaz]

I went to the means testing site. What is the difference between operating and ownership costs for a vehicle?

[optimistic1]

From what I understand, you are allowed both of the "deductions", however, the ownership costs deduction is decreased by the amount of money you pay for that car in terms of a monthly payment. So subtract it (your car payment) from the allowable deduction and that is the max allowable ownership deduction. The operating costs you are still entitled to regardless.

Here is the official means test form, sometimes it kind of explains things.

http://www.usdoj.gov/ust/eo/bapcpa/defs/docs/samples/BK_Form_B22A_V1.pdf

Check out page 4, and 5.