Can I still Qualify for a CH.7?

[JPOP1]

During my free consultation the BK lawyer pretty much made it sound like I had to file a ch.13. Because my wife and I together make around 65K a year which is above the average income for a family of 2. Before I lost my previous job our combined income was around 105K. Anyway, we were working through all the Bills and living expenses that I have and even with me letting my truck go back,eliminating a $630.00 a month payment,I still dont have enough left over to pay anything to my unsecured creditors. I'm sure that I have read on this forum that if you dont have any thing left over to pay the unsecured creditors that you could file ch.7. Is this true? What parts am I missing?

Joint NET income $3,900.00
- 1st Mortgage $1,335.00
- 2nd Mortgage $ 635.00
- 1st Car $ 558.00
- Utilities,Exp. Etc. $1,450.00 (this is basically all the other living expenses)

Total equals minus $78.00 a month. This is with me leaving off the 2nd car payment of 630.00 a month and removing around 300.00 dollars in gas of the transportation cost. I still need to try and get a small 2nd car payment so I will have something to drive to work.
I'm sure one of the 1st things that is going to be questioned is the large 2nd mortgage payment of 635.00. Well I'll save that one for my next post!

[lrprn]

During my free consultation the BK lawyer pretty much made it sound like I had to file a ch.13. Because my wife and I together make around 65K a year which is above the average income for a family of 2. Before I lost my previous job our combined income was around 105K. Anyway, we were working through all the Bills and living expenses that I have and even with me letting my truck go back,eliminating a $630.00 a month payment,I still dont have enough left over to pay anything to my unsecured creditors. I'm sure that I have read on this forum that if you dont have any thing left over to pay the unsecured creditors that you could file ch.7. Is this true? What parts am I missing?

Joint NET income $3,900.00
- 1st Mortgage $1,335.00
- 2nd Mortgage $ 635.00
- 1st Car $ 558.00
- Utilities,Exp. Etc. $1,450.00 (this is basically all the other living expenses)

Total equals minus $78.00 a month. This is with me leaving off the 2nd car payment of 630.00 a month and removing around 300.00 dollars in gas of the transportation cost. I still need to try and get a small 2nd car payment so I will have something to drive to work.
I'm sure one of the 1st things that is going to be questioned is the large 2nd mortgage payment of 635.00. Well I'll save that one for my next post!

What tells you if you can file Ch 7 or must file 13 is how everything comes out when your own figures and the mandated government figures for housing, transportation, etc. are plugged into the Means Test and what emerges at the end as "disposable income". Diesposable income on the bk forms is not income minus expenses. Whenever the government is involved in creating processes, nothing will ever be that straightforward.

If you haven't made your free consultation appointments with 2-3 bk attorneys in your area, now would be a good time to do so. A good attorney knows the ins and outs of what is accepted in your bk district for expenses and secured payments. This could be the difference between Ch 7 and Ch 13 in a borderline case.

[JPOP1]

Thanks 1rprn, I printed off the Ch.7 means test and filled it out. I'm pretty confident that its accurate. During the test I kept coming up without any extra money to spend, basically using all the figures I used in my original post plus the IRS standards that you have to use. In the end I had to check "The presumption does not arise". What does this mean?

[SinkingFast]

What State, JP??

There's a degree of flexibility in the Means Test.

Being below the Median just means you get to stop at like Line 7. Doesn't mean you cannot qualify for a Ch 7 just because you're over the Median.

The Means Test "favors" Secured Debts. You'll get to deduct the exesses that you pay for your mortgages and auto payments over and above the Schedules Allowables.

Once you go thru the Means Test, you may find that you indeed have less than $100/mo in disposable income. That's figuring in you keeping the 2nd car and that payment. If that's the case, then you could qualify to file a Ch 7.

[SinkingFast]

In the end I had to check "The presumption does not arise". What does this mean?

When you can check the Presumption of Abuse does not Arise box, it means you wouldn't be filing a frivolous Ch 7.

[JPOP1]

State: North Carolina

[SinkingFast]

Brain fart moment there.

Like knowing the State would help us help you to run the Means Test. Rent/Mortgage is by county. DUH!!

But your present income is definitely over the Median.

Have you Consulted with more than one attny?? If not, I'd suggest you chat with a few more.

With your current Secured Debts, you could have a good case for filing a Ch 7.

Remember when calculating the car payments, you have annualize out/forward 5 years. So if you have 2 years remaining on one of those notes, the $$$'s/mo will be significantly lower than what you currently pay in payments.

An unknown variable is what's going on behind the scenes in your District. Could be the US Trustee for your District is very closely monitoring ALL Ch 7 filings. We learned yesterday that that's the case in our District. With the implementation of the New Law, Ch 7 filings have been significantly reduced and the US Trustee is reviewing ALL Ch 7 filings.