Any success stories filing 7 when over median income?

[my2girls]

Hi All,

Getting ready in about 4-6 weeks to file Chapter 7 hopefully. We have retained an attorney (met with 6 before we made our decision) who says even though we are above the median about $20K yearly but have no assets and a negative dmi he feels we should go for it. Any advice from those of you who might have been in this type of situation on how to be successful?

Thanks for your help.

[jeep75]

There are many people on this site who were over median and successfully got discharged in chapter 7.

We are over median, passed the means test, no issues at the 341 meeting, no presumption of abuse was filed within the 14 days. We are about half way to discharge now.

[momofthree]

If you have 1. a large mortgage and/or 2. high out-of-pocket medical expenses it may be do-able. $20k over median isn't a piddly amount though, so if you don't have 1 or 2, then you need to consider that you may be a ch.13.

[jeep75]

Also child care costs help a bunch if you have it.

[my2girls]

Well don't have a large mortgage or high out of pocket medical expenses. What would make the trustee question our dmi?

In regards to child care I have a 13 year old and a 8 year old. My 14 year old attends a different school so I have to have a neighbor $20/day $500/month to take my 8 year old home from school and watch her every day. I just pay her cash (she certainly doesn't want to claim it) will this be questioned?

[my2girls]

Well we don't have a large mortgage or high medical expenses (although we definately have a couple hundred a month). Is there something the trustee will look for that will disqualify us?

In regards to child care I have a 13 year old and a 8 year old who go to seperate schools I pay around $100-$150/week to my neighbor to pu my 8 year old after school until I get home from work. She certainly doesn't want to claim this. Will this be questioned. I also pay for care in the summer. I don't think it's fair for my 13 year old to have to watch her sister for 45 hours per week. Any thoughts?

[Pandora]

Childcare is something that you may have to provide proof of payment for; generally it would be claimed on your taxes as a deduction.

Did you / your spouse get a significant pay raise in the past 3 weeks that brought you from $8K over median to $20K? As momofthree mentioned, that's not a small amount - you're going to have to account for how you arrived at a -DMI. What does your schedules I & J look like?

[my2girls]

Putting finishing touches on them now...I'll post for your opinions.

[justbroke]

I received a discharge while being significantly over the median. It can be done, but almost always requires a.) a large mortgage, b.) high expenses, c.) a large family! While some people make it through the 341 Meeting without the United States Trustee (UST) showing up to ask questions, the majority of over-the-median income filers will have the UST question them at the meeting. The UST will also take interest in an over-the-median income case and will poke around at your numbers. The UST never showed at my meeting and never requested additional information. I'm sure that they poked, but my numbers were good since I qualified for Chapter 7 when I filed my Chapter 13!

[IamOld]

justbroke, now you're scaring me! Is it a MAJORITY of over the median filers...always? Or does it depend on WHERE you are? For example, my metro area is WAY above the state median - in other words, MANY people here are over the state median...there is a HUGE difference...do you think that matters???

[justbroke]

justbroke, now you're scaring me! Is it a MAJORITY of over the median filers...always? Or does it depend on WHERE you are? For example, my metro area is WAY above the state median - in other words, MANY people here are over the state median...there is a HUGE difference...do you think that matters???

No it doesn't matter. The Office of the UST (OUST) is simply administering the program. It's easier for them to scrutinize ONLY the over-the-median income filers than to do it for every single case. In fact, they are having trouble trying to audit a mere 2% of cases!

In any event, it's no reason to be scared or concerned. It just means that your case will be reviewed and they will look at the numbers (expenses). People who are under-the-median go "under-the-radar" and hardly ever -- unless audited -- have their numbers looked at (scrutinized). Remember, the way that the code is written is that it's based on the State median income, not a metro area.

Think of it this way... if a person making $175K a year files and lives in Manhattan (New York County) NYC, would it matter that they had a rent-controlled $1K/month apartment, or renting an apartment for $6K/month? Absolutely! This is why the numbers must be looked at! There are offsets in the "expenses" based on where you live within a State. This will adjust your expenses up-or-down based on your actual County within that State. The UST understands this, but will look at the numbers when an over-the-median filer files. Now, will they go to the trouble of opposing discharge in EVERY over-the-median case? No. However, being over-the-median is an indication that you "may not be" needy and deserving of a Chapter 7 discharge. Think of it just as a "bright-line" or "benchmark" for determining which filers to review more closely.

It is still the majority. Whether the UST in New York County scrutinizes every debtor who is over-the-median, is another story. I would still think that it raises flags.

(FYI, the maximum rent for New York County for a family of 4 is $4,567. In my example, a person paying rent of $6,000 would be $1,433 over the expense guideline! Certainly enough to pay almost $90K to unsecured creditors in a 60 month plan.)

[ValleYum]

Family of 2 here. Big Mortgage. No Toys. Two Cars. Ironclad Dental/Medical Bills over Collection Standards. Over median by 20k+. Not a word from the UST. Trust me when I say that your attorney will know how the UST in your area reacts to over-the-median filers. On day 18, I called our attorney's office with a question about reaffirmation (cars) and I mentioned how glad I was we had passed the 14 day time frame for a UST objection - my attorney's paralegal said she knew we would be fine and here it all depended on the color of the smiley face you were given (during Means Testing) by their software program. ?!?! Really?!?

[IamOld]

Thank you!!!!!!! justbroke and Valleyum - I know I sound like a broken record, but where I live my state's mediam income wouldn't be enough to die on much less to live on. On the other hand, the only things that for us are larger than the norm is:

a) our ins from spouse's employer is expensive...but it is what it is.

b) ANNUALIZED our med expenses are $800/mo - why? Four people with contacts/glasses, plus spouse with TWO chronic conditions (expensive meds/etc per mo), plus spouse with braces (yes...long story but not cosmetic) - just the meds and braces are like $300/mo CASH, plus me and my shrink every two weeks, etc. PLUS regular dr/rx and dental "stuff." I still need ALL wisdom teeth out...(I don't think so but dds does) - oh and so does spouse :-)

c) I drive LITERALLY 100 miles a day total to/from work in stop and go traffic - gas for me alone is $80/WEEK.

d) one car is above IRS by $200 BUT we've had it for three years

...atty didn't even bat an eyelash on the above...

[Freddy03]

We are over the median about 10K and nothing was questioned at 341. We do have a large mortgage.

[IamOld]

We are over the median about 10K and nothing was questioned at 341. We do have a large mortgage.

Thank you Freddy!