disposable income?

[worriedbk7]

I just have one more question. After payday, I have no money left (I am actually behind) But after I file (subtracting credit card debt, house payment and car) I have like $700 leftover. Is there any way that they could put me in chpt. 13? I don't want to keep the house or car. Will the trustee ask me where my money is going because I haven't been paying on anything (lawyer's advice)

[HHM]

If you have $700 in disposable income, you will have no choice but to file Chapter 13. If you try a seven, the US Trustee would likely object. My guess is, you are woefully underestimating your expenses.

[worriedbk7]

Yeah, but the only reason I have so much leftover is because I am filing chpt 7. Are you telling me that even after I file chapter 7 that my bills have to exceed my income? Also, could I quit my job for a few months and wait til this is all over then work again. That would certainly qualify me for the chpt. 7!Thanks for your reply

[HHM]

Yeah, but the only reason I have so much leftover is because I am filing chpt 7. Are you telling me that even after I file chapter 7 that my bills have to exceed my income?

In short, yes. Disposable income is defined as income over and above your reasonable necessary living expenses. If you have "disposable income", then you are presumed to be able to make some repayment to your creditors and therefore will be forced into a chapter 13 or you will have your chapter 7 dismissed.

However, what counts as a reasonble living expeses is a very broad concept.

As for quiting you job, I am not even going to touch that question except to say, it rarely makes sense (and incidently, where are you going to get the money to live while you are out of work), and you would be committing fraud.

[worriedbk7]

Thx HHM! I think I AM underestimating my expenses. My husband is taking a 24K pay cut to take on this new job. He gets this job in April and we are not filing until Aug. Is this also considered fraud?

[hhou812hh]

Whatever descision you come to it seems like the chapter 13 in it's present form is a lot better for debtor's then the new chapter 13 (after Oct17,2005). 36 months of your disposable income is probably much better then 60 months and if needed you can "cram down" any car liability to it's face value. It seems uncomfortable to have the court place a leash on you for 3 years but since almost no one can dispute a ch13 and it still maybe cheaper (in the long run) then paying all of your debts it's better then nothing.

Personally I think the means test is one thing, but Congress should have left ch13 bk's alone as opposed to killing the debtor with the new form.

[AnnieG]

What is the allowable limit of disposable income before a CH7 gets pushed into CH13?

In short, yes. Disposable income is defined as income over and above your reasonable necessary living expenses. If you have "disposable income", then you are presumed to be able to make some repayment to your creditors and therefore will be forced into a chapter 13 or you will have your chapter 7 dismissed.

However, what counts as a reasonble living expeses is a very broad concept.

[HHM]

You can probably have about $100 income over your expenses and still stay in a chapter 7, but anything more than that, and the trustee will likely want you in a chapter 13.

[cpginvegas]

we are in chapter 13 and at our 341 hearing the trustee asked for actual receipts for many of our claimed expenses such as yard, pool and home maintenance. Luckily for us, we had actually listed less than we really pay. That is after we were paying 1700 a month into the plan. Some of the trustees are very strict as to what they will allow as normal expenses