expense standards vs actual- Chapter 13

[button08]

Hello everyone:
I am located in SW Florida and I have been lurking this website for a few months gathering and analyzing info. and I must say it's been very helpful and I am very thankful I found this forum. I have a question on auto payments and morgage payments for filing chapter 13 - in this district are we allowed the IRS standard of $496 per vehicle or is it the actual payment itself? and what about mortgage- is is actual or IRS std for our county? We lost our business about 4 months ago and although my income is above the state median for a family of 2- some of the research I have done indicates we may still be eligible for a Chap 7 if my husband has no income to report for the 6 month look back period. But that also dep. on the answers to these questions, our auto and mortgage payments are lower than the standards. So now we have potential disposable income. Thx for any info.

[LadyInTheRed]

Hi! Glad you decided to come out of lurking.

You can use the standard expenses on the means test for the cars. For the mortgage you use the higher of your actual mortgage payment or the standard allowance. But, you use your actual expenses on Schedule J. Your Chap 13 plan payment will be based on your Schedules I & J if they show more disposible income than your means test does.

If you file a Chap 7 and your Schedules I and J show you have enough disposible income to fund a Chap 13 and pay a substantial amount of your unsecured debt, the trustee could object to a Chap 7. If the difference between your actual car payment and the allowance is enough to put you in a Chap 13, it may be time to buy a new car and increase the payment. Of course, you only want to do that if you will be able to afford the payment after a Chap 7 discharge.

Before deciding you can't qualify for a 7, consult with a few experienced BK attorneys.