Means Test Question

[iduuno]

This may have been covered, but Searching, I didn't find an answer.

If you have loans on 2 cars, joint filing together,...

Do you get 1/60th of the car payments, or,...

1/60th of the car payments plus the residual of the $517/vehicle ($1034 total).

I ask because I saw a filing on PACER in our area where the attny only took the actual car payments. Filers were $3K above the Median.

We passed on the legalconsumer.com Means Test Calculator, but it gave us $517/vehicle, or $1034 total.

Northern Indiana if anyone can help.

[justbroke]

If you are completing the Means Test, then yes with caveats. On Official Form B22A (the Means Test for Chapter 7), you put the amount on line 23a or 24a indicating the amount of the National Average which is currently $517. The amount on line 23b and 24b, is a little tricky! You need to re-amortize your loan as if you obtained a NEW motor vehicle loan for the current amount due at the current interest rate (that's on your contract).

You use "that" payment that you amortized the balance due on your vehicle as the amount on line 23b and 24b. Voila!

(NOTE: this assumes there are no arrears. If you have arrears, this may be more complex.)

[iduuno]

No arrears.

So are you saying we only get the payments, reamortized, total. Not the $1034 we're allowed for NTS's?

[justbroke]

You get BOTH! You get the re-amortized payment on (Form B22-A) line 42. You also get the difference between the national average ($517 PER CAR) less the amount you put on line 42. I call it double dipping, but that's the way the Means Test was written!

[iduuno]

That's the way the Means Test Calculator at legal consumer.com ran our numbers. Research, however, was ambiguous at best.

We have one payment that amortized a bit higher. One way lower due to 21 mos left on that note. Pick up $8 on one, loose $250 on the other. Cost of ownership sure does help.

Sorry for bumping that old thread in the other section. Didn't see the date until after I posted. ;)

[LadyInTheRed]

justbroke, I think you are referring to an old form. The relevant form is Now form B 22A-2. The vehicle ownership expense is line 13b. You can download the form at http://www.uscourts.gov/forms/means-...st-calculation.

[justbroke]

LadyInTheRed darn that US Courts site. That's where I was looking. To be honest, I was directed to the US Courts site by a link on a Bankruptcy Court's (District) web site to some forms that were wrong.

Thanks for the catch.

[LadyInTheRed]

Keeping websites current is not a great strength of courts in my experience.

[iduuno]

Thanks much for help and info!!

I freaked out because that one case I saw, the attny just took the auto loan payment amounts. Not the $1034 total for 2 vehicles.

Is it possible our area only allows the payment amounts?

[justbroke]

Is it possible our area only allows the payment amounts?

No, it is not possible. Perhaps the other attorney made a mistake or the person was using an "ownership allowance" where the vehicle is more than 7 years old or has over 100,000 miles. That "old car rule" is pretty District specific. In that case, you may see $200 used on that line.

[iduuno]

OK,.... I checked. (Saved for reference.)

Both vehicles are 2009's. Less than 100K miles each.

The couple was $3K over the Median. Surrendered their house. Got all the standard allowances, except the vehicles. The attny entered their car payments amounts. Same as their Schedule J. Their Means Test came out -$150/month. If the attny had taken the full $1034, they would have been WAY negative.

Now a new question,.....

You mentioned over 7 yrs/100K mile,....

One of our cars is a 2007 with 75K miles. We have a loan on it. I know about reamortization, but,....

What happens there??

[iduuno]

Actually, it's a SUV. Not a "car" per se. We just call it our car.

[justbroke]

You mentioned over 7 yrs/100K mile,....

One of our cars is a 2007 with 75K miles. We have a loan on it. I know about reamortization, but,....

What happens there??

If the car is encumbered, has a loan, then you amortize the loan and still receive the entire allowance. The "over 7 years/100K miles" is a special case where some attorneys in some Districts would squeeze out that $200 allowance when the car was unencumbered (no loan) and was "old" (> 100K miles / 7 years). However, the Supreme Court ruled in Ransom to quite the opposite so it's not that common.

Let me add this... having a car that has a low payment and claiming the ownership allowance is the best. I had one car that had an re-amortized $157/month payment and I received the $517-$157 credit alongside the $157 payment as an expense. That's an additional $360 that was in my budget but wasn't technically an expense; I call it a cushion. If there was no loan on the vehicle I would have lost $517 of expense credit. (I hope that illustrates how it works.)

[iduuno]

Phew! Thanks much! I worried it being over 7 years old DQ'd that one.

I had read about the Ransom Decision. Glad you mentioned it, though.

The $517/vehicle really helps us on the Means Test.