DMI and 3 vs 5 year

[ladyjenn]

Ok...here is my story at least what I can come up with.
We will have about $250 DMI at the end of the month.
We are $20K under state median for a family of 4. All the debt we have is unsecured and about $41K

I am guessing we will be put into CH13 when we finally get to file. Is there a chance we will only have a 3 year plan opposed to the 5?
Thanks in advacne. This is so hard! I can't wait for this to be all over. I am actually getting on meds tomorrow to help with the anxiety....

[momofthree]

Yes, if you're under the median income, you have the option of choosing a 36-month plan. However, if you have a minimum to pay into the plan that cannot be paid within 36 months, then you can extend it to up to 60 months if need be.

[ladyjenn]

Yes, if you're under the median income, you have the option of choosing a 36-month plan. However, if you have a minimum to pay into the plan that cannot be paid within 36 months, then you can extend it to up to 60 months if need be.

I just added that all our debt is unsecured, and we are current on our mortgage. So it looks good for 3 years? YAY!!! Something positive for a change!

[HHM]

Maybe I am missing something, but why do a 13? If your under median, it really doesn't matter what DMI you have on schedule I&J. (within limits, of course). You STOP taking the means test once you are under median. You don't go onto the next section.

But yes, if you are under median, then you can do a 36 month plan.

[SMinGA]

Under median has access to 36 months. And if you show $250/mo remaining DMI on schedule I/J - it shows you can do a ch. 13. HHM has been around much longer than I have, but if you have that much DMI as far as I know ch. 7 will be an uphill battle at best. Otherwise there would never be under median ch. 13's unless someone was behind on the mortgage...

Discuss with your attorney if there are any expenses you could or should reasonably increase to cut down the DMI. What are your deductibles on auto insurance? Should you decrease them to $250-500 if now at $1000? Do you have life insurance? If not, adding a basic policy for each of you might be a good idea. Are you contributing to 401k's now? If so, at what %? Ask attorney if you could bear to increase it by 2-5% each? Also if you are in the habit of making charitable contributions, that is reasonable to claim as an expense. KEep receipts and/or check copies.

If your attorney feels changes such as those would be reasonable, you might want to make the changes & then wait a few months to file to build history.

[ladyjenn]

Maybe I am missing something, but why do a 13? If your under median, it really doesn't matter what DMI you have on schedule I&J. (within limits, of course). You STOP taking the means test once you are under median. You don't go onto the next section.

But yes, if you are under median, then you can do a 36 month plan.

I thought we could only have around $100 DMI to file CH 7? I am still new to this and I know you know your stuff! If you could clarify for me that would be great! If you need more info, I can provide that. Are you saying we could do a 7 since we are under median even though we have around $250 DMI?

SMinGa (hi again) Thank you again for your input! This forum has been great and terrifying at the same time. I wish for a CH7, but with at least $250 DMI, I fear we are looking at 13. I can handle that if it is only 36 mos. 5 years scares the beJesus outta me since we both drive older vehicles and are going to need a new roof on our house within a few years.

I can't wait until we can actually crunch numbers with our atty!

Thanks again guys!

[catleg]

You just need more term life insurance to temporarily mop up that $250.

[HHM]

As others have said, $250 in DMI on schedule I&J is pretty easy to mop up. I don't see any reason you cannot be a 7 with the right lawyer helping you.

The trick is, there is always some problem with the petition if the means test has you under median yet I&J shows DMI, with a properly crafted petition, that can almost never happen. Also, the mere fact that you have DMI on schedule I&J (but are under median) does not mean you automatically get kicked into chapter 13.

[ladyjenn]

I think I need to wait and see what the laywer says once we start the process. I come up with $600 DMI, but can get that down to the $250 mark, but I am not a lawer and don't know what is allowed and not allowed. This is just what I am coming up with on my own. Is ther a place I can see a copy of the schedule I-J?

[newbie2]

I think I need to wait and see what the laywer says once we start the process. I come up with $600 DMI, but can get that down to the $250 mark, but I am not a lawer and don't know what is allowed and not allowed. This is just what I am coming up with on my own. Is ther a place I can see a copy of the schedule I-J?

I got it now. You have $600 in DMI and have already done the "mopping up" to get it down to $250. This is what you need the attorneys advice for, as he/she will know what will fly in your district and what won't.

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx

That is a direct link to the US bankruptcy court forms.

[momofthree]

And, in case you haven't already seen the IRS standards, they are listed here: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm