If I make below my state median income,

[hootown]

can I automatically file Ch 7 or do I still have to take the means test?

[9877donna]

can I automatically file Ch 7 or do I still have to take the means test?

If you make below your States Median Income then you qualify for Chapter 7 and do not have to make out the Means Test in full.
Good luck.
Donna

[hootown]

Can you give me an idea of what I would have to fill out for the means tets if I make less than the state median income. Is there anyway they can push me into CH 13 if they think I have enough disposable income?

[SinkingFast]

Go to:

http://www.usdoj.gov/ust/

Click on Means Testing in the BK Reform box.

At the top of the page, you'll see in blue highlight B22A and B22C. If you're below the Median, you fill out B22A so you'd click on that.

You complete the top portion, compare your income to the Median, if you're below, you check the box for Presumption Does Not Arise and you're done with the Means Test on Line 15.

Also, there's a Means Test Calculator at http://www.legalconsumer.com. Pretty kewl. It will do a lot for you automatically. Thanks to Catchmeifyoucan for finding that site.

I know how you feel. Worrying about being forced into Ch 13.

We just filed Ch 7, below the Median, No Asset.

I worry that the Court will not allow something in our expenses on Schedule J and say "You can pay that back to your Creditors in Ch 13 plan payments."

It's outa our hands now. All we can do is wait and see.

[hootown]

Thank you for the link. If someone is below the median income and has no assets, how can they be pushed into Ch 13? This is probably a dumb question, but if you fall under the median income, don't you skip the part about writing down your expenses? I'm confused as to why you had to write your expenses on schedule J . I'm hoping for less paperwork and less stress.

[SinkingFast]

When you file a BK Petition, you have to complete ALL of the Schedules regardless of whether you above or below the Median. Unfortunately, there is no 1040EZ for filing BK.

Schedule I is for your Income. Schedule J is for you actual expenses. And the Court, in some cases, has been looking at Schedule J to determine if a Filer's actual expenses are reasonable or not.

[anonymuse]

Thank you for the link. If someone is below the median income and has no assets, how can they be pushed into Ch 13? This is probably a dumb question, but if you fall under the median income, don't you skip the part about writing down your expenses? I'm confused as to why you had to write your expenses on schedule J . I'm hoping for less paperwork and less stress.

Here's different examples of why someone should be a Ch 13 instead of a Ch 7.

1) Jane Doe makes $30K a year which is below the median. Say she takes home $1750 a month. But when you look at her expenses, she drives her junker car that she purchased for $1500 (minimal upkeep, low insurance); she walks to work (minimal gas); she shares the rent ($250 her share) and utilities and food with 5 other friends who live in the same house; her work pays her full medical and dental she's very healthy. Her true monthly expenses are $800.

2) John Doe makes $30K a year which is below the median. He takes home $1750 a month. Even though John is not a dependent, he lives at home, uses the family car. Work provides for medical insurance. His real expenses are $400 a month.

One of the basic intentions of the new laws are to get people that can pay back some or all of their debt to pay them back.

In these scenarios, it makes sense to me and seems logical that these people shouldn't be able to discharge all of their debts and should pay back at least part of them.

Sometimes I think there are some semantics issues with the means test. Everyone must fill out all of the forms.

Form B22A is called "The Statement of Current Monthly Income and Means Test Calculation". If the CMI is less than the median income, then you only fill out the form to part III "Application of 707b7 Exclusion". Some people refer to the means test as Form B22A, others refer to the means test as the sections to fill out after part III. The purpose of the means test is to decide if there is a presumption of abuse, not necessarily (depending on the interpretation of the individual trustee) the amount of actual disposable income available to put into a plan. In non-legalese, if someone doesn't have the presumption of abuse, look hard at their true (Schedule I & J) expenses. If someone has the presumption of abuse, look even harder and get out the magnifying glass to examine for forms.


Everyone must also complete Schedule I and J for income and expenses, respectively.

[hootown]

If I make below the median income and drive an old car that is paid for, is it possible for the trustee to push me into Ch 13 bc in his or her judgement I have enough disposable income to pay off some debts as a result of not having a car payment and a smaller monthly car insurance payment ?

[SinkingFast]

We own our cars. No payments. Old beaters. But we have maintenance costs. They've all been requiring repairs. One month it's a brake job for one. Next month it was EGR and oxygen sensor for another. Next month new belts and hoses. Then a water pump and new thermostat. And of course, you get to deduct your auto insurance and gasoline expenses. Average those expenses on a per month basis and list that on Schedule J.

So even tho you do not have a car payment, you can deduct expenses related to the ownership of your car.

[anonymuse]

If I make below the median income and drive an old car that is paid for, is it possible for the trustee to push me into Ch 13 bc in his or her judgement I have enough disposable income to pay off some debts as a result of not having a car payment and a smaller monthly car insurance payment ?

Yes, one of the basic intentions of the new laws are to get people that can pay back some or all of their debt to pay their creditors back.

[no_it_all]

Yes, one of the basic intentions of the new laws are to get people that can pay back some or all of their debt to pay their creditors back.

Can you post a link to someone that was under the median and was forced into chapter 13? TIA

[hootown]

Also how often is someone forced into Ch 13 even though they make less than the median?

[lrprn]

Can you post a link to someone that was under the median and was forced into chapter 13? TIA

This webpage gives a good example of how a debtor can be under the state's median income but not be eligible for Ch 7 - http://www.businessnorth.com/businesslaw.asp

According to http://bankruptcy.lawyers.com/Chapte...cy-Basics.html
"If your monthly income is less than your state's median income, the (Ch 13) plan will be for three years unless the court finds "just cause" for a longer period."

Bottom line: what really matters isn't whether your income is under or over your state's median. What matters is whether the means test shows you have disposable income and how much Most bk trustees and judges are using the pre-Oct 05 minimum of $100/month disposable income to decide if you can be pushed into a Ch 13 or not.

[anonymuse]

Your ability to payback based on actual income and expenses (Schedule I & J) is the key factor. Being below the median income does provide the advantage of having a 3 year plan instead of a 5 year plan.

Hootown, look at the examples I provided. Those are perfect scenarios where people should be paying back some instead of wiping out all of their debts.

[hootown]

Anyone have a link for the allowable expenses in a given area for schedule J ? Do you only need receipts if your expenses in a certain category is above the allowable number?