Too much for a 7, not enough for a 13??

[lady elaine]

Quick question here,

When I run some numbers on the Best Case Bankruptcy download, it shows that I am likely not eligible for a 7 (aka it gives me a sad face), but the payment for the 13 is not even possible (800? how does it think I have that each month??).
Now my numbers may not be dead on perfect, as I half of this software I do not understand at all, but even when I run the numbers for utilities, 1st, 2nd mortgage, food, and gas, I now come up with something like 87$ left for a payment each month towards a 13.

How on earth would that work?

Basically if we did not have our 2nd, I could have the 800 it says I would need for a payment, but the 2nd will not go away, will it?

[laurannm]

How did you come up with $87 for a payment...were you using form 22C?

[lady elaine]

I tried putting the data into the means test for a 7, and it shows that we have $ left over after our utilities etc are paid, but it is getting this number from the 6 month average that includes a bonus last March. The 87.00 is what I know we have at the most after I pay our 1st and 2nd mortgages, car, utilities etc and no cc's. I do no understand how the courts could find any additonal funds to pay anymore then that, because it just is not there every month as our income fluctuates.

[laurannm]

That's the big problem with the means test. It is a 6-month average of your income from all sources, including payments such as your bonus. So unfortunately your means test will show inflated numbers. This is where BK planning comes in...you want to try and plan your filing so that your 6-month look-back doesn't include one-time payments, such as your bonus. So in this case if you waited until Oct to file, your bonus would not count on the means test. How does your means test look if you took the bonus out?

[lady elaine]

Hmm, hard to say what October looks like. My husband is due to get another bonus in September and as of today it looks like 12k after taxes. Yes, that is an ok bonus, but not nearly enough to cover our bills unfortunately. So come October, our income will be about 13k less, but still too high. I am wondering if medical costs will help us out with this a bit though. Between my daughters meds and my MS medication that insurance is likely not going to cover on the 1st of the year (2k a month just for me in meds), it may make a difference.

[lrprn]

Lady Elaine, you really need to find out where you fall on the Means Test by setting up free or low cost initial consultations with 3-4 experienced bankruptcy lawyers in your area. Go in with all the questions you've asked here and see what they say. Compare answers - chances are you are going to get a majority to agree about which chapter you can file.

The Best Case software is ok, but you don't know how your local court and trustees are going to interpret the gray areas of income and expenses. The lawyers will - that's why you need their advice a lot more than you need our 'best guesses', especially if your income is close to the median

[oldrocker]

I'm going to echo the others to go sit down with a couple of lawyers and see what they have to say. I ran the means test 40 ways to Sunday and kept getting different answers. When we met the first time with our lawyer I handed him one sheet of paper with our debts and assets listed, one sheet of paper with our last 6 months of income broken down by month and totaled. He looked over both asked a few questions spun his chair around to his computer ran the means test. Within our first 15 minutes with him he was able to tell us we could do a 7 or do a 13 with just our priority debt (taxes) in it. When we filed 3 months later we did a 13 with just about the exact payment he told us at that first meeting.

Didn't mean to get so long winded but unless you easily qualify for a 7 then go let a lawyer straighten it out for you and explain your options, otherwise you'll just keep thinking yourself in circles. Those circles can cause alot of stress.