Seen a Bankruptcy Lawyer today and have many questions.....

[Guest123]

Guest123 - thats what we were trying to tell you in this posting but you got so very defensive and told everyone they were incorrect.

http://www.bkforum.com/showthread.php?63440-High-trustee-payment/page3

You can still do a Ch. 7 if you are over median but have neg DMI (meaning you do not have enough to fund your plan to pay secured items, lawyer, and trustee fees). You may have to just let the vehicles go....

I wish you all the best and hope you can get it figured out.

I left that thread along because of this post stating exactly what I said:

Just a little information. Plan payment is NOT the DMI value calculated by the Chapter 13 Means Test on Official Form B22C. Plan payment is based upon a combination of the DMI on Form B22C and payments on secured debt (if paid through Trustee), priority debt (taxes), and the Trustee administrative fees.

Based on that I was correct and your were incorrect! Thought you understood that when you stated justbroke was that man.....

Letting the vehicles go is not an option. And I don't see how that will do anything but make it harder to do a ch.7 as it will add more DMI to the outcome.

The problem with us and the MeansTest is our 401K contrabution and a 401k loan, we can't add them so it makes it look like we have more DMI then we really do.

[Guest123]

Your overtime will fall off of your lookback as of Dec.1st, so just wait to file until Dec. and then file a ch.7. You will probably have to let the quads go though, and possibly other secured debt as well so that you can make ends meet after the ch.7.

Sorry about the cut in pay Good luck and keep us posted.

As of now my lawyer was currently using the lookback ruling for our normal payments and from my understanding in my case they can still use the overtime and bonuses if it is needed to pay secured debt.
Again I don't see how letting go the secured items I have now will help as that will increase my DMI making it even harder to do a ch.7......unless I'm missing something.
The only items we need are the cars. No question about it. Everything else could go if a ch.7 was possible.
After going over a few things it doesn't look as bad as it seems.

Thanks for the replies and I will keep everyone updated.

[Pandora]

I left that thread along because of this post stating exactly what I said:

Based on that I was correct and your were incorrect! Thought you understood that when you stated justbroke was that man.....

Letting the vehicles go is not an option. And I don't see how that will do anything but make it harder to do a ch.7 as it will add more DMI to the outcome.

The problem with us and the MeansTest is our 401K contrabution and a 401k loan, we can't add them so it makes it look like we have more DMI then we really do.

No... Justbroke just stated it differently than I did, however the exact same issue was mentioned to you by several people that you must pay secure items, trustee and lawyer fees. Secured creditors, priority claims (taxes), non-exempt items (if applicable), trustee fee's and lawyer fee's...all play a part, that unequivocally and ultimately will have to do with DMI. If you dont have enough $ to pay back your secured and priority items items, trustee fee's and lawyer fees (if you rolled them in) then you cannot fund a 13 plan payment.

Not going to argue with you - again trying to help you but apparently you dont view it that way so I wont bother any longer with any of your posts.

Have a good day and good luck to you.

[LadyInTheRed]

Again I don't see how letting go the secured items I have now will help as that will increase my DMI making it even harder to do a ch.7......unless I'm missing something.

Letting the secured items go won't help you qualify for a 7, but it may help lower your Chap 13 payment. If I understand you correctly, the $1300 payment is above your $500 DMI, because the payment includes payments on the secured debt. If you give up secured assets, your payment will go down. Also, if you are keeping non-exempt assets, that may also be making your payment higher than it otherwise would be.

The bankruptcy code does not require that all secured debt be paid during the plan. Do the loans extend beyond 5 years from your filing date? I believe you should be able to keep paying on the debt after the Chap 13. I think that debt just wouldn't be discharged. I'm not 100% positive about how that all works, especially if a trustee requires the secured debt be paid within the plan.

[momofthree]

As of now my lawyer was currently using the lookback ruling for our normal payments and from my understanding in my case they can still use the overtime and bonuses if it is needed to pay secured debt.
Again I don't see how letting go the secured items I have now will help as that will increase my DMI making it even harder to do a ch.7......unless I'm missing something.
The only items we need are the cars. No question about it. Everything else could go if a ch.7 was possible.
After going over a few things it doesn't look as bad as it seems.

Thanks for the replies and I will keep everyone updated.

Oh, I must have misunderstood you. I though that the overtime was the reason you didn't qualify for a ch.7. So, you'd have to file 13 even without the overtime? That sucks.

You've said a few times that you can't afford the secured payments without your overtime, so I assumed (you know what they say about people who assume, lol) that you wouldn't be able to continue to make those payments if you didn't have the overtime 2x a year any longer.

[Guest123]

No... Justbroke just stated it differently than I did, however the exact same issue was mentioned to you by several people that you must pay secure items, trustee and lawyer fees. Secured creditors, priority claims (taxes), non-exempt items (if applicable), trustee fee's and lawyer fee's...all play a part, that unequivocally and ultimately will have to do with DMI. If you dont have enough $ to pay back your secured and priority items items, trustee fee's and lawyer fees (if you rolled them in) then you cannot fund a 13 plan payment.

Not going to argue with you - again trying to help you but apparently you dont view it that way so I wont bother any longer with any of your posts.

Have a good day and good luck to you.

WOW talk about thickheaded! Justbroke said it is NOT just DMI and yet you continue to argue with me about it.

I'm sorry but I just don't find any of your post helpful at all, if anythign they are confusing as you are repeating what others are saying...just slightly differently and calling them wrong, when in fact you are giving wrong information.

[Guest123]

Letting the secured items go won't help you qualify for a 7, but it may help lower your Chap 13 payment. If I understand you correctly, the $1300 payment is above your $500 DMI, because the payment includes payments on the secured debt. If you give up secured assets, your payment will go down. Also, if you are keeping non-exempt assets, that may also be making your payment higher than it otherwise would be.

The bankruptcy code does not require that all secured debt be paid during the plan. Do the loans extend beyond 5 years from your filing date? I believe you should be able to keep paying on the debt after the Chap 13. I think that debt just wouldn't be discharged. I'm not 100% positive about how that all works, especially if a trustee requires the secured debt be paid within the plan.

See I don't see how letting the secured items which are cars go, all that will do is turn up more DMI, correct. It is the same for either a ch.7 or ch.13
Correct the plan payment includes secured debt.

I need to ask my attorney about if the cars need to be paid off within the plan as I think both loans will barely extend alittle longer then 5years.....good question.

Thanks

[Guest123]

Oh, I must have misunderstood you. I though that the overtime was the reason you didn't qualify for a ch.7. So, you'd have to file 13 even without the overtime? That sucks.

You've said a few times that you can't afford the secured payments without your overtime, so I assumed (you know what they say about people who assume, lol) that you wouldn't be able to continue to make those payments if you didn't have the overtime 2x a year any longer.

No I tried the means test with and without the overtime and either way doesn't look good. The only way to file a ch.13 without the overtime is to let go of the cars (secured debt) and then we would have a higher DMI that would most likely have to be paid into the plan and be stuck with some unreliable junkers. And with our job that wouldn't work.

Thanks again for the replies.

[LadyInTheRed]

See I don't see how letting the secured items which are cars go, all that will do is turn up more DMI, correct. It is the same for either a ch.7 or ch.13

I think this is where the discussion in that other thread got confused. I was thinking of DMI as being the "net monthly income" on line 20.c of Schedule J. I think others were too. But, as you know, DMI is what is on the means test. Whatever is on Sched J, Line 20.c. (your actual current income less your actual currrent expenses) is going to be your plan payment, unless you can pay 100% of your debt with less. Ideally, you would enter your income and expenses on schedule I and J and, presto! You have your plan payment. But, if you fill out Schedule I and J and come up with $500 on line 20.c., but you have to pay at least $1,300 a month to cover secured debt being paid in the plan, priority debt, trustee fees, attorney fees and any non exempt assets you may be keeping, you need to adjust your expenses on Schedule J to show $1300 of net income. Schedule J should not include secured debt that will be paid in the plan. So, if your plan payment has to be at least $1,300, if you abandon some of the secured assets, your minimim plan payment will go down and the amount of net income you need to show will go down too.

For example, if you owed $36,000 on one of your cars and you gave up that car, your minimum plan payment would be reduced by $600 ($36,000/60) to $700, so your schedule J net income only needs to be $700. It may also increase your DMI on your means test, but you can deduct your 401k loan from the DMI on your means test, so hopefully there is a net advantage.

Does that make sense?

[johnjan2009]

all, Sorry but just trying to chime in since I don't have enough posts yet to do my own :- Anyway, can you file chapter7 and still keep your home(1st mortgage is current), 2-cars(1 paid off and 1 financed) and discharge all other unsecured debts like credit cards including 2nd loan/heloc? Home is underwater by $250k. Just trying to get consensus prior me start hunting BK atty and will really appreciate it. BTW, DMI showed negative which mean qualified for chapter7?

[muzzey58]

Nothing is worth being harassed by debt collectors. I have been in an active chapter 13 for 4 years now. I have about a year left and will be glad to be out of it. The laws were changed in 2005. There wasn't any means tests. If you were broke then you qualified for chapter 7, no questions asked. Lobbyists stole the right for the average citizen who is middle class to file chapter 7. The big banks have created this economic downfall. They paid big bucks to lobbyists to push for the bankruptcy reform of 2005. Even before that though there were tight restrictions on what you could keep in bankruptcy. Letting the quads go will be a small price to pay for peace of mind.
While you are in a chapter 7 the time to discharge is usually within a much shorter time frame. You file and basically are discharged within a certain period of around 6 months. After that you start completely fresh. Your credit profile is clean except that a bankruptcy is listed. Any credit problems after you file are a strong possibility in a 13. You barely have enough money to pay bills. If you have emergencies such as my husband and I have encountered then you're in trouble. In February, my husband fell and broke his rib. In June I dropped a heavy object on my foot and broke my foot. Just two months later I had surgery on my arm. We have health insurance but have alot of deductibles. Try explaining to hospital creditors that you can't pay $2000 in one lump sum. One creditor said for me not to pay my car, my rent nor bills just to pay the deductibles. I am paying what I can. You don't want to be in this predicament. I'm sorry that you may lose your home. But thankfully you are employed. Someday, you will be back on your feet and you'll be able to enjoy the fruits of your labor. This will be over before you know it. It's been 4 years and it just seems like yesterday. I wish you the very best and good luck.

[FishersMike]

Hi Lady,

Okay I guess I have been confused too. I thought I read here that most Trustees make your plan payment off the 22C Means Test. So okay all the money I need to make for everything secured is about $700.00 -- so I need to have the Schedule J show at least $700.00 net income == so let's say it shows $750.00 net income - that would mean that my plan payment is $750.00 regardless of the DMI or plan payment figured on the 22C? So essentially 50 a month going to unsecured?

Also 401k voluntary contributions and loans can be deducted on line 55 of 22C -- where to we list on schedule J, other expense? Or do we not list it here and make it seem as though our monthly net is higher? Thanks!!

Michael

[walkthaplank]

Mike, every district is a little different. In my district the trustee objected to me paying a 401k loan AND contributing to my 401k... essentially they chose the lower number and objected to that. The upside is that I can put that money back into my 401k once the loan is paid off without having a "step-payment". Keep this in mind going into your 341 and the confirmation process.

My lawyer didn't tell me there would be an issue, but when it came to the confirmation process the trustee just tossed out jargon regarding the objection and raise my payment (nearly double) and I had no idea where that number was coming from. Because I had an "appearance lawyer" at my hearing, nobody explained to me what had happened. When I spoke to my attorney afterward he told me about it. When I asked why he didn't say anything up front, I got the phone equivalent of a shrug and a "eh, we thought it would go through". Be forewarned, ask your lawyer where they foresee any objections and have them give you a worst case scenario with expenses. Had I known this going in, we could have padded in other areas to anticipate the objections and avoid them outright. Good luck!

[gman]

Do you know how much over the Means Test you are right now?

Do you owe any back federal or state taxes?

[FishersMike]

Means Test I get it over by $11.00 a month -- with projected payment just being shy of $700.00. Yes I owe about $15000 in taxes, but that was already calculated as Priority and in that payment, along with my car and attorney's fees.