Means Test and Schedules I & J

[getouttadebt]

Sorry in advance for this ignorant question...

Form B22A is quite clear when it comes to the Means Test if you are over the median income (which I am). My monthly disposable income is negative using the IRS standard expenses, but only $-35.63. Thus, I pass the Means Test and presumption of abuse does not arise. But, then I received the UST's Statement of Presumed Abuse...not a good feeling here.

So, if you are over the Median income, but pass the Means Test with a small negative number, what might the UST be looking for in Schedules I and J that would cause the Statement of Presumed Abuse? In other words, how do Schedules I and J map back to the Means Test?

I was really concerned last week about my 401k contribution being the trigger for the Statement of Presumed Abuse. But, we did not use any 401k contribution deduction on the Means Test, just on Schedule I. And when we subtract Schedule I from Schedule J, I have a $-559.93. My attorney has been in court and I am getting answers only from the law clerk at the firm, so I am concerned.

For the more sophisticated folks in this forum, here's what my Statement said,...

"...the UST has determined that: (1) the Debtors' case should be presumed to be an abuse under Section 707(b); and (2) the product of the Debtors' current monthly income, multiplied by 12, is not less than the requirements specified in Section 704(b)(2)(A) or (B)."

It appears that the Statement of Presumed Abuse exists because I am a high wage earner, but it doesn't take into account that I am a huge debt holder, too.

I am just looking for insight here since I can't seem to find any support from anyone other than this forum.

Thanks,
getouttadebt

[diviaruba]

Unfortunately, the Means Test is only a "safe harbor" for the presumption of abuse for the below-median income debtor. For above-medians, the UST has a duty to review all of the debtors materials and make a determination as to whether the debtor's case would be presumed to be an abuse under 707(b) within 10 days after the 341 meeting. Five days after receiving the statement, the court is to provide a copy to all creditors.

If I remember your case, it seems that the UST wants to fold your $1200 401K contribution back into your Schedule I income and show a $600 surplus instead of a $600 deficit.

[getouttadebt]

It is only my *assumption* that this is what the UST is having issue with -- there has been no specific reason given for the Presumption of Abuse. I was having issues understanding how the Schedules I and J mapped back to the Means Test. So, thank you, Divaruba, for the explanation.
I was considering reducing my 401k contribution effectively immediately to 4% because my company only matches 50% up to the first 4%. This way, I can see what the net effect is on my income after taxes and possibly I could file an ammended Schedule I & J to reflect the update. I asked my attorney this question but no response yet. Anyone have thoughts on this?

Thanks,
getottadebt

[diviaruba]

It is only my *assumption* that this is what the UST is having issue with -- there has been no specific reason given for the Presumption of Abuse. I was having issues understanding how the Schedules I and J mapped back to the Means Test. So, thank you, Divaruba, for the explanation.
I was considering reducing my 401k contribution effectively immediately to 4% because my company only matches 50% up to the first 4%. This way, I can see what the net effect is on my income after taxes and possibly I could file an ammended Schedule I & J to reflect the update. I asked my attorney this question but no response yet. Anyone have thoughts on this?

Thanks,
getottadebt

Try this calculator first, and play around with it before changing your contributions:

http://finance.yahoo.com/calculator/career-work/pay-02

[getouttadebt]

Thanks so much, Diva, I will not do anything at all until we find out what the UST's beef is. Thanks also for the reference to Skovrecz...

getouttadebt

[diviaruba]

Here's the opinion, if you want to read it:

http://www.cob.uscourts.gov/opinions/06-12278order.pdf