Question on new law

[hhou812hh]

I read many times what's involved with the new law, but what I find strange is that when I work a 40 hour week (no OT or side work) and figure out my take home pay after taxes and insurance deductions my take home salary is about $50 more then what the IRS allows me to in expenses based on the IRS tables for my region. According to this finding I would qualify for a ch7 even under the NEW plan. Before I count my chickens before they hatch I will bring it by my atty next week. No wonder why 2 atty's I spoke with kept saying I may qualify for a ch7 today.
The problem is that because I file my taxes single, have no kids, no mortgage, etc. I get KILLED in taxes so my take home pay is much, much less then a family making less money then me. I also pay a lot into my health insurance through my employer.

The reason I am filing a ch13 mostly is due to some heavy charges in the month of May and I don't want to risk anyone disputing it. If my atty says next week that I can qualify for a 7 in the new law, hell I will wait six more months from now and do it.

Any ideas? Suggestions? I understand that no one has any experience under the new law so whatever input you have is fine. Thanks!

[HHM]

How heavy were the chareges in May? I think if you wait to file in the first week of October, you could do a chapter 7.

Also, you may still qualify for chapter 7 under the new law, but the hoops you will have to jump through (not to mention that using an attorney will cost you double what it costs now), you are better off filing now.

[hhou812hh]

How heavy were the chareges in May? I think if you wait to file in the first week of October, you could do a chapter 7.

Also, you may still qualify for chapter 7 under the new law, but the hoops you will have to jump through (not to mention that using an attorney will cost you double what it costs now), you are better off filing now.

HEAVY! Very heavy! like 30k. I had some unexpected legal issues as well as paying off my old car loan and buying a new car. This was done in late May/Early June. This was the last time I used any credit. I even mentioned it on other threads and even you (HHM) said they may show up at the 341. Charges/Advances this big no matter who tells me what, I still feel they would dispute it even though Oct will be four full months. I basically have 2 choices and that is a ch13 which I was strongly considering or wait six months from now and do a ch7 under the new law. I honestly think that even if the creditors don't dispute this the US Trustee will. One other advantage from the new law is that (providing there is no fraud) the US Trustee and even the judge can't dispute very much since it's based on the IRS tables. The high legal fees and hoops still maybe worth it just to avoid any trouble.

I'll let you know what my Atty says.

[HHM]

Sorry, I don't keep a running tab on everyones story. But your probably right, that amount of charges will probably give rise to a dispute from a the creditor.

However, as for the trustee, he/she probably won't care, and really, it doesn't concern you anyway. The trustee has to file a lawsuit against your creditors to get that money back, it really doesn't effect your BK.

Note, under the new law, the IRS tables are just a starting point (they are means test), you still have to list what your expenses "actually" are, and if they are lower than the IRS tables so be it; you don't get to claim up to the maximum amount of the IRS tables if you don't actually spend that much. If you "actually" spend less and have disposible income at the end of the month, you will still be put into a chpater 13.
However, in most circumstances, it will be rare that someones spends less than the IRS amount, but realize, if you do, chapter 13 is still a likely possibility and all they need is to show that you can pay $100 per month for 60 months and you will be put in a chapter 13 under the new law.

The means test under the new law is a two part deal, First, you need to make at or below your states median yearly income for someone in you situation (i.e. single, married, married with 2 kides, etc etc). If you make above that amount, forget about it, your in a 13 (with a few exceptions). If you fall below the median income, then the IRS expense tables come into play. But again, its a starting point and you still have to list your actual expenses. So for example, lets say the IRS allows you $1000 per month in housing expense, but you really only pay $800, you can only claim $800.

[hhou812hh]

[QUOTE=HHM]Sorry, I don't keep a running tab on everyones story. But your probably right, that amount of charges will probably give rise to a dispute from a the creditor.

However, as for the trustee, he/she probably won't care, and really, it doesn't concern you anyway. The trustee has to file a lawsuit against your creditors to get that money back, it really doesn't effect your BK.

Note, under the new law, the IRS tables are just a starting point (they are means test), you still have to list what your expenses "actually" are, and if they are lower than the IRS tables so be it; you don't get to claim up to the maximum amount of the IRS tables if you don't actually spend that much. If you "actually" spend less and have disposible income at the end of the month, you will still be put into a chpater 13.
However, in most circumstances, it will be rare that someones spends less than the IRS amount, but realize, if you do, chapter 13 is still a likely possibility and all they need is to show that you can pay $100 per month for 60 months and you will be put in a chapter 13 under the new law.

The means test under the new law is a two part deal, First, you need to make at or below your states median yearly income for someone in you situation (i.e. single, married, married with 2 kides, etc etc). If you make above that amount, forget about it, your in a 13 (with a few exceptions). If you fall below the median income, then the IRS expense tables come into play. But again, its a starting point and you still have to list your actual expenses. So for example, lets say the IRS allows you $1000 per month in housing expense, but you really only pay $800, you can only claim $800.[/QUOTE]

Yeah you just explained it perfectly. I know about the means test and the states median income and if what you can payback is 25% or less then the debt. I thought they based debtors expenses strictly on the IRS guidelines and that was it (too easy).

So a ch13 it is...

One more question re: a ch13 and that's if I would happen to convert to a ch7 due to an unexpected hardship like unemployment in a year or so from now and I can't qualify for a ch13 hardship discharge, would the creditors still cry fraud since I made my "best effort" to pay them back or would they treat it as if I were filing a ch7 when I filed the 13?

[newday]

So for example, lets say the IRS allows you $1000 per month in housing expense, but you really only pay $800, you can only claim $800.

what if you actually pay more? list it as it is or list the IRS maximum?

[HHM]

what if you actually pay more? list it as it is or list the IRS maximum?

As of right now, it doesn't matter, the current law applies and the current law does not rely on the IRS tables.

I haven't seen all the new forms (although they have been released to bankruptcy professionals), so I don't know how they are asking you to LIST them. But, if you pay more, it really doesn't matter as you are limited by the IRS tables (for the most part) for purposes of the disposible income test.

[hhou812hh]

what if you actually pay more? list it as it is or list the IRS maximum?

One thing for certain, while the new laws are not as forgiving as the current law at least the IRS tables are in line with what I spend and probably with what most others spend. I was under the impression that the new laws will force us all to eat macaroni and cheese for 5 years and drive a 1979 Ford Pinto for as long. While being forced into a 5 yr ch13 may SUCK at least it's better then paying back everything that's owed which will take 20 or more years in some cases. I just hope they adjust transportation expenses as fast as gas & oil keep going up.

The only thing that's unfair about the new laws is how it's based on the "past". They calculate your income for six months and figure it that way. Some people may have been doing fine for years and suddenly fell on hard times such as a bad accident or terrorist attack and their job is lost and gone forever and now they have to wait over six monts plus all the other hoops to file and qualify for a ch7.