attorney says cannot use mortgage payment for means test!

[lilhelpplease]

Met with an attorney today, who told me for the means test:

that because my mortgage was over what the IRS allows (Irs allowance per means test :$1155, my payment is $2100.00) that I could not use my actual mortgage payment. He said that if I did use my actual mortgage payment that I could not use the Utility allowance either???

He also said because my car would be paid off within 2 years that I can not use it on the means test either since it will not be a secured debt for the next 60 months.

Is there any truth to all of this?

[nojusticehere]

I may be in a similar situation. I owe on Furniture (secured) that will be paid off in Aug-Sep. I filed BK 7 and my atty said there may be a problem and I may have to convert to 13 but we included it anyway.....we shall see what happens.

[lilhelpplease]

I guess the thing that I have a problem with...

to me this is saying that everyone that files a chapter 7 has car payments over 60 months ... and if they don't then are all of the car payments under 60 months left being disallowed?

[jmstay]

None of that sounds accurate to me. Our attorney is odign both. I found that our 1st 2 consults were quick to push us into a 13 because of our income and never mentioned the possibility of using the house (which well put us into a 7 passing the means test). In fact, we were so negative on our I/J that one attorney was telling us that we did not have enough income to file and needed to find more.


I suggest that you speak with another attorney, many members recommend 3...I would as well. this is toooo big of a deal to get bad advice on. If beign aggressive does not work then you will likely be no worse off (my opinion). We ate 1k backing out of our last attorney going to new, I still think it is worth it to know that we tried even if we fail.

[lilhelpplease]

Actually this is the 5th attorney I have talked to. The first 4 INSISTED on a Chapter 13, because we are over the median income. They wouldn't even look at expenses, they all just took down gross income.

This is getting so frustrating. I completed both Schedules I and J and we are actually in the NEGATIVE -$800 each month! (We are trying to see where we can lower this amount)

[Knew_it_all]

Is there any truth to all of this?

Well, maybe some, but not a lot. I strongly urge you to download a copy of the means test and plug in your own numbers. Line 42 on the means test is where you would input your mortgage payments and any other secured claims. Make sure you include monthly principle, interest, taxes and insurance for your home.

Regarding your automobile loan: Multiply your monthly payments by the number of months you have left on the loan. When you have that number, divide it by 60. Put that number on line 42 also. For example, if your payments are $400 per month and you have 24 months left, that will total $9,600. Divide that by 60 and put $160 on line 42 right below your mortgage.

Understand that the means test formula is rather convoluted. You add up numbers from one line (like your automobile payments) and subtract it another line (your allowed automobile expenses). It is almost impossible to understand unless you actually punch in numbers yourself. You really should do that so you know what is going on. It also makes replying to your questions easier if you have a handle on what is involved..good luck

Also, find another lawyer..Actually he may be ok, but not explaining things so that you can understand them. For example: Since your automobile payment is going to be subtracted from the <allowed expenses> you are in reality only going to get the <standard IRS deduction> for automobile expenses. Hard to explain, you really have to look at the means test calculation worksheet to see this..

[Scooter10]

Lilhelpplease,
I agree with know_it_all, If your lawyer can not explain things to you, I would get a new one.

I just finished my 341 with over 100K in annual income and I am staying in a 7. It took 4 differnent consulatations until one would even consider me a 7. The first three wanted to force me into a 13 right away without looking at anything.

Keep looking and you will find a good lawyer that will meet your needs.

SCOOTER10

[Knew_it_all]

Lilhelpplease,
I agree with know_it_all, If your lawyer can not explain things to you, I would get a new one.

Ah, that would be Knew_it_all........No_it_all has been banned for ten days ;-)

[lrprn]

Ah, that would be Knew_it_all........No_it_all has been banned for ten days ;-)

Great to see you post such useful information for our members, Knew_it_all. Yin and yang....welcome back from your short trip to the dark side ;)

[gophermn]

I am using my primary residence and rental property on the means test. In fact I had two attorneys tell me that I would not qualify for a CH7 without the mortgages.

Good luck!

[lilhelpplease]

Well what the attorney told me was, because it is such a high payment the trustee will disallow the utility allowances?

I was just wondering if I should keep wasting my time because I keep getting difference answers ...

However, from the replies I have received here, (which are all VERY VERY helpful) I realize that must continue my search....

Thanks everyone, especially Knew_it_all, had the attorney explained what you did to me it would have made much more sense ....

[PaKettle]

Even though you talked to several attorneys already I would still talk to another one or two. Maybe you can find one at www.nacba.com...

The info he gave you may be right but it doesn't sound right to me...