Chapter 7 and expenses

[pa308]

If you are under the median for your state are you automatically eligible for chapter 7 without them looking to see how much your income exceeds your expenses? This is very confusing as i am hearing many different things. Some say that since im under median i still fill out i and j forms but this =- 100.00 doesnt come into play?????????? Does it only come into play if over median??

[jp2861]

The I & J schedules will still be applied, as well as the $100. This is to prevent people that have little to no expenses from abusing the system. Example: 25 year old is still living at home with no rent, utilities, or food bills. He/she maxes out all the credit cards and then plans to file. They have a good paying job but scrounging off Mom and Dad. The laws are set up to stop someone from abusing the system.

If you're over the median a whole new set of computations come into play. You may or may not be qualified for a Ch 7, based on how much disposable income you have left. Disposable income is the key to determining abuse, so the forms are needed.

It's too much to write here but if you do a google search for computing the means test you'll find a ton of sites that explain it in easy to understand terms.

[ameliabedilia]

I was confused about this as well, but have been told by various lawyers and other experts that you have to fill out all the schedules no matter what- including I and J.

[SinkingFast]

On the Means Test,...........

You'd complete Form B22A. Once you get to Lines 13 and 14, your actual earned income is compared to the Median. If you're below the Median, on Line 15, you'd check the box for "Presumption Does Not Arise" and the Means Test is complete.

From there, the Court would move to a comparison of Schedule I, actual earned income, to Schedule J, actual living expenses. If I vs J shows +$100 or more per month, you could be forced to convert to a Ch 13.

We've not had anyone report that that's happened. But theoretically it can.

Generally speaking, good attnys and saavy Pro Se filers know or learn what's accepted in their Districts. They submit BK Petitions that show slightly positive to a bit negative on a monthly basis.

[pa308]

My annual income is 49k which is under the median for family of 4 in pa. below are what i see as my expenses currently, some are guesstimates. Do they look reasonable and have i missed anything? it leaves me with about 240 extra. Could that push me 13 then??

mortgage 810
life ins 93.9
home eq ln 200
food 400
car ins 150
cable/intern 117
bus 60
student loan 132
heatring 150
pawc 40
electric 75
vz 25
vzw 75
sewage 50
apparrel 150
gasoline 250
car upkeep 80
lunch money 76
home maint 100

[ssdsco]

Off the top -

healthcare - premiums, employee costs, drugs (legal) copays
daycare
food for a family 4 is only $400 ?????
taxes and insurance included in mortgage escrow ?

[qwertysue]

Check the IRS national/local standards as well to get some idea of what you can use.