What happens if not enough disposal income.........

[pamkev]

we are jut at the starting stages went to see one lawyer who was not interested in us asking question have 3 more appointments with 3 others lawyers but hoping someone here can help we can not claim chapter 7 over the income level for our state Pa and after finally sitting down and making a budget I don't know how we did it all these years well that's not true I do know kept charging everything on the card and then transferring balances then the economy went bad hubby work hours got cut we should have filed then but didn't thinking we created this debt we must get out of it long story short have to file chapter 13 and we have 150.00 over at the end of each month to pay to creditors which is all credit cards. This allows for no emergencies I kept our mortgage current so I guess my question is what happens if the trustee thinks we do not have enough to pay and won't allow a chapter 13 will we have to sell our home to pay the cc. Hope this makes some sense Pam

[JessMN]

If you don't have enough to pay creditors in a 13, you would be a 7 - its not all about you being over the income level - there are plenty of people who file chapter 7 and make a heck of a lot of money

[pamkev]

Thank you Jessica, the first lawyer told me we made to much money and could not file a Chapter 7 at all. I wonder if it was just to make money as a Chapter 7 was way less then a Chapter 13. I will make sure I get a answer from the other three to my question or will just keep looking for lawyers.

Pam

[JessMN]

Hmmm, so you make more money than all those Hollywood people who have filed chapter 7 (Toni Braxton, Nick Cage, Gary Busey, etc)? Glad you aren't going with that lawyer

[JessMN]

I found this quote:
If your annual income is too high to file for bankruptcy, you may be able to qualify by showing a low disposable income. Disposable income is what you have left to spend every month after paying for necessities such as food and shelter. The second part of the means test requires you to enter the expenses you have on a regular basis and calculate a net disposable income. The courts use national and local data to determine normal expenses for where you live and determine if your expenses are within allowable limits. If after subtracting these costs, you show little to no monthly disposable income, you qualify to file Chapter 7 bankruptcy. If your income is still too high, the court will not accept your petition.

Read more: Do I Make Too Much to File for Bankruptcy? | eHow.com http://www.ehow.com/info_7924789_do-...#ixzz1ovD4KudG

[keepsmiling]

Wow that was one loooong sentence lol.
Any number of people have come here with the exact same story: lawyer told them right off the bat they "make too much" for a 13; and with a bit of due diligence, found it wasn't so and successfully completed a 7 instead. Chances are you don't want to use a lawyer that can't be bothered to get any more info from you anyway.

Keep your appointments and see what the others have to say. What are your high expenses? do you pay for childcare? private school? support for other family members? college tuition? It makes a difference.

Good luck and keep us posted.

Btw, some here do manage to do a 13 paying 100 a month. If it comes down to that.

If you want to post your expenses/income, folks here are pretty good about critiquing.

[SMinGA2]

Some people have a reason that they cannot do a ch. 7. Such as if they have done a ch. 7 less than 8 years ago. Or if they have non-exempt assets that they want to protect. Or save a home that is behind on payments. Those are the 3 I can think of, there are probably others.

If you have no reason to choose 13 over a 7, then it depends on your income and expenses. Some expenses you would NOT count: credit card payments, student loan payments, IRS/medical payments. You would not count these things because they would be part of your plan. You would want an accurate & reasonable budget for expenses. (Including 'emergencies' like home & car maintenance.) That is where working with a good attorney is very useful.

[LadyInTheRed]

Some expenses you would NOT count: credit card payments, student loan payments, IRS/medical payments. You would not count these things because they would be part of your plan.

If you have past medical bill and tax payments that you are currently paying, they won't be included in your expenses on the means test to determine eligibility for Chap 7. But, you do count your ongoing medical expenses and tax liability as part of your living expenses.

[SMinGA2]

My understanding is that if these unsecured debt payments can be used to fund a ch. 13 plan. Say you have a -$175 I/J DMI, but that includes $200/mo on medical bills and a $250/mo agreement to the IRS each month. That would actually be a $275 DMI for a plan payment.

To clarify: by medical payments I meant bills for prior service, not ongoing medical expenses.

[pamkev]

Yes we have about 750.00 in past medical bills due and we are current with all taxes.

[pamkev]

What is a DMI

[pamkev]

Some people have a reason that they cannot do a ch. 7. Such as if they have done a ch. 7 less than 8 years ago. Or if they have non-exempt assets that they want to protect. Or save a home that is behind on payments. Those are the 3 I can think of, there are probably others.

If you have no reason to choose 13 over a 7, then it depends on your income and expenses. Some expenses you would NOT count: credit card payments, student loan payments, IRS/medical payments. You would not count these things because they would be part of your plan. You would want an accurate & reasonable budget for expenses. (Including 'emergencies' like home & car maintenance.) That is where working with a good attorney is very useful.

I thought I could not count students loan in the plan

[LadyInTheRed]

My understanding is that if these unsecured debt payments can be used to fund a ch. 13 plan. Say you have a -$175 I/J DMI, but that includes $200/mo on medical bills and a $250/mo agreement to the IRS each month. That would actually be a $275 DMI for a plan payment.

To clarify: by medical payments I meant bills for prior service, not ongoing medical expenses.

If the trustee makes the payments to the IRS, which is a priority debt, that is how it would work. The only reason I would see the medical debt working that way is if the debt is secured. Otherwise, it is unsecured debt and is treated just like credit cards.

What is a DMI

Disposible monthly income.

I thought I could not count students loan in the plan

It depends on how they are treated in your local court. In some courts, student loans can be paid through your plan. In others, they would go into deferment during your Chap 13.

[mountanddo]

Btw, some here do manage to do a 13 paying 100 a month. If it comes down to that.

My chapter 13 is $100/month for 36 months. I couldn't file a 7 because I filed one a little more than 7 years ago. I wish I could of waited it out but Capital One ended up serving me with a summons. I couldn't afford to have my wages garnished which would of been about $575/month. Chapter 13 was the better alternative.

[pamkev]

My chapter 13 is $100/month for 36 months. I couldn't file a 7 because I filed one a little more than 7 years ago. I wish I could of waited it out but Capital One ended up serving me with a summons. I couldn't afford to have my wages garnished which would of been about $575/month. Chapter 13 was the better alternative.

Thanks how long was it before Capital One served noticed