High Income and Chapter 7

[Walangatik]

Has anyone been successfull in a chapter 7 filing with high income?

I will be filing next week. I make good money but have 2 properties, 2 cars, property taxes, hoas, insurance etc.

I passed the means test.

I usually get 10000 back as a refund. Will the trustee demand that from me later?

Anyone have any tips?

[jwmc1]

what is "high income?" I am also in this boat, but did not pass the means test because of the limits on expenses

[DeadManCrawling]

what is "high income?" I am also in this boat, but did not pass the means test because of the limits on expenses

Some of the "limits" on expenses are not really limits.

I know there are "standards" in every state, but the actual numbers mean more than the accepted standards, at least in most cases.

I, too, and way over median.

But I have a $3800/month mortgage payment. It is acceptable in my district (and in most, I think), to use ACTUAL numbers, even though they exceed the usual limites, as long as you can prove the expense is real.

Our utility bills run over 2k per month, can be proved, and our attorney says we will be fine. By utilities, I mean electric, water, propane, garbage and so on. Not cable TV and such.

[jwmc1]

I want to file Chapter 7, but everything I read says that if you don't pass the means test you simply can't...is there any gray area?

[Regrets]

We are what I consider high income ($120,000), but we pass the means test without padding, so it can be done.

[jwmc1]

How much unsecured debt did you have? We are at $145,000 in income...

[whipster1]

You can justify paying for where you live, but "properties" other than your home will be seen as an asset and liquidated. Ten K as a refund seems a bit excessive dontcha think?

[lrprn]

Anyone have any tips?

An important question first....

Are you trying to file your case without a lawyer (pro se)?

If you are, I strongly urge you to reconsider and file with a knowledgeable and experienced bk lawyer in your area. You have a very complicated case and you have high income to boot. Your case is going to be gone over with a fine-toothed comb and will definitely come under the US Trustee's watchful eye. You could inadvertently make an innocent mistake that could cost you dearly.

What worries me is that you've stated a lot of assumptions here - that's extremely dangerous in your situation.

[jwmc1]

The only thing I have is the house and it is way under water...everything else is old, not much available for anyone to sell

[backtoschool]

The only thing I have is the house and it is way under water...everything else is old, not much available for anyone to sell

Where do you live? Some districts make it very difficult for high income chapter 7 filers.

In New York for instance, they have a huge US Trustee's office that tries to put high income chapter 7 filers into chapter 13. I passed the means test for a chapter 7 when I lived in nyc as well, and was told by my lawyer that there was absolutely no chance that the US Trustee wasn't going to get involved and put me into a Chatper 13, and a 100% chapter 13 to boot. I ended up not filing. I got laid off in January and was able to get my income down and file for chapter 7 anyway.

If you have a high income you can usually expect the following:

1. Very close examination of each and every expense. If your house payment costs more that the average for your area, or your car is a luxury car, or you have private school tuition, etc... the US Trustee will put you in a chapter 13 and tell you to get rid of those expenses.

2. Very close examination of the values of your house, land, cars and property. Expect the trustee to ask for current appraisals.

3. Very close examination of any deposits or transfers of money in and out of your bank accounts in the last year.

Now there are always exceptions to the rules, and there will be posters that will come on here and say that they sailed through there high-income over the median chapter 7 without being asked any questions. But that is not the norm. Do a search on US Trustee and presumption of abuse cases on this board and you will see over the median filers that have had proctology exams from the US Trustee.

Documentation of all expenses, transfers, and appraisals will be the key to surviving a high-income chapter 7.

[jwmc1]

I live in Michigan...I used to make about $200,000...but the last two years I have lost about 35% of my income and next year it will be a little lower then that.

[backtoschool]

I live in Michigan...I used to make about $200,000...but the last two years I have lost about 35% of my income and next year it will be a little lower then that.

I moved back to michigan from nyc in February, and filed for chapter 7 August 3.

If you read my older posts, you will find my story. I made 175k last year.

I think you may have a difficult time with such a high salary in Michigan. That is way over the median for Michigan. The comments I put above in this thread will most likely apply.

[techguy74]

I moved back to michigan from nyc in February, and filed for chapter 7 August 3.

If you read my older posts, you will find my story. I made 175k last year.

I think you may have a difficult time with such a high salary in Michigan. That is way over the median for Michigan. The comments I put above in this thread will most likely apply.

Did you have to notify your employer before or after you filed?

[HakunaMatata]

Did you have to notify your employer before or after you filed?

Notification is contingent upon policies. BK may not be a concern in numerous industries. In my case, I have to notify officials after filing in order to maintain my license. Failure to do so would result in termination.