7 question above median fail means test....but have other expenses at the bottom

[ssscamaro]

Hi,
Lawyer is burning up my funds I paid him working on my chapter 13. Married filing singly as all unsecured debt in my name.

I just went back and did the means test again after some advice in the chapter 13 section being offered that even if income over median 7 still an option.

So I go through the test..end up with $690 disposable income. 128,000 of unsecured debt. It comes up as not allwoed "presumption of abuse".

What the test doesn't take into account is my $900 of monthly work expenses.
Much of that is gasoline so I would guess that goes under the standard vehicle deduction?($556)
But what about the remainder? I am an unreimbursed commissioned sales rep. Business meals travel tolls gifts parking cell phone internet ect out of my pocket. All required to maintain my level of income.

Could I still qualify for a 7?


We are upside down in home...owe more than its worth but current. So everything is unsecured but just can't make payments any more....I honestly don't know how we made it this far..well I do credit cards!

[pamkev]

Here was our experience as we were in the same situation as you what made us a 7 instead of a13 was our high heating cost to the tune of 6000.00 a year way over what they allow for. We live in a big old drafty house and last year was the one time I was glad for that. Of course the US TT objected to the amount this was before our 341 meeting. We had the last four years of bills to show them along with the electric bills gave the US TT everything she asked for. Went to our meeting and the US TT was not there as my lawyer was expecting it was done and over with in 5 minutes and 60 days later we were discharged and case closed.

Pam

[DeadManCrawling]

What state and district are you in? Local legal precedents determine a lot of the questions you are asking.

For instance, in our chapter 7 case: We were almost $90,000 per year over the median, which would have/should have triggered a presumption of abuse. But it did not. The reason this happened, was that all those expenses were associated with our house and the associated upkeep. This was in Florida Middle District. This district has a previous precedent which essentially means: If you are surrendering the house, those expenses STILL count on the means test for your debts. Even if they are excessive, they cannot deduct them and look forward with that information.

This served us well, and I think properly. The reason we had such high expenses in the first place, was that my previous income was also very high. I had been earning a tremendous income of over 400k per year most years. An injury and pending disability ended my career, and the numbers simply were decimated into a giant mess. The court knew all this, and we emerged from BK with a LOT of income. Far beyond normal. BUT, the income was on the far end of drying up.

We were able to use the excess income to buy a much smaller house, with cash, and get ourselves set to live at a much lower income, entirely on disability, as the income dried up.

In that sense, it all worked as I think it should have. Whether the same applies to you is dependent on your location and situation.

We gave up a lot, but gained a lot. We were also an asset case, maybe more honest than some, and I gave up a number of assets, which totaled around 35k in value, in the process.

So, with that in mind, it comes down to local precedent, the judge, and your particular circumstances. Can you explain more?

[justbroke]

It really depends on whether those expenses can be easily documented, occurred over a significant period of time (not speculative or "recent"), how "interested" the UST becomes in your case (which they will), and that you can actually show disposable monthly income (DMI) less than the threshold. I would not try to file a Means Test (B22A) with the DMI reading over (positive) $200/month; nor should the Schedule I/J test show more either.

In your case, you hire an attorney that will look at your total expense picture and put those expenses on the Means Test and Schedule J (Expenses). You should then expect that the UST will become interested in your case and start to question your numbers. If you can seriously prove -- tax returns for years -- your numbers and show receipts for a significant period of time (do not ask me what significant is, but think 2 years of tax returns), then you can overcome the objection or at least let the Judge -- not the UST -- decide.

[AngelinaCat]

Since you said that your "lawyer is burning up your funds" working on a CH13, that means that he/she has been retained. Did you see at least three others before settling on this one? Is this one willing to work with you or not? If not, I would seriously consider getting some other consults/opinions before your case goes any further.

We also started out planning a CH13, with the only lawyer we ever consulted. We ended up filing a CH7, because of job losses, but she never educated us in the BK process, other than handing us a general information leaflet. We made several costly mistakes in our BK, and became an Asset Case because of it.

We did not find this forum until well after all the mistakes were made. We learned far later that we should have gone with a different attorney, who is also a Trustee (of course he would not be Trustee on our case.) But it was too late for us to fire the current attorney and go with another one, or go pro se.

It isn't too late for you now, if I am reading your post correctly.

Good wishes to you!