confused about Median income & Means Test

[LaidOff53]

DH & I are planning on filing chapter 7 in Oct due to a permanent Layoff 6 months ago, and waiting until an extra unemployment check drops off . I went to legalconsumer.com and filled in all the info and while we will pass the median income ( 25,152 ) in 6 months , I also filled out the means test and it says that we have 345.00 per month of disposable income to pay a 5yr chapter 13 . I thought that if we were under the median income that we wouldnt have to go chapter 13 .
also , we had to take 2500 out of our 401K to pay for federal income taxes last month . does this count towards our 6 month income ? We had no choice we didnt want to be late on that . we hope to keep our home and are current on the mortgage & 53000 in CC's which will change because DH UC checks have run out as of last week and we have no clue when the Emergency UC will kick in so the CC's arent going to be paid from here on out.

[eddiep]

Do you have $345 left at the end of the month? Figure out your actual expenses, you may have messed up on the test. It is kind of confusing.

As far as the 401k withdrawal counting as income, well it depends on where you live. It does count in my district, but there are other areas that it doesn't. You will have to ask your lawyer who is familiar with the rules in your district.

[LaidOff53]

yes , when i did the means test and it is showing that we have $345 left each month to pay for a chapt 13 , I filled out the entire form but maybe i am missing something. But does that mean that even though we were under the median for a 7 that we still maybe be forced into a 13 ? I live in PA and i sure hope we dont have to count the IRA withdraw in the 6 months income we have to report , but i didnt want to get behind on our federal taxes We have enough problems right now , I have a sick feeling in the pit of my stomach because we can not make our CC payments in the next few days, but the money just isnt there , DH unemployment runs out this week and have no idea how long it will take for the emergency unemployment checks to start so things are going to go downhill very quickly !! I feel the mortgage is the inmpotant bill to pay right now. We have never been late on anything before so this is just making me ill at the thought not paying them. I dont know why i should care at this point thou, just yesterday we recieved a letter from Chase mastercard telling us that they are closing both credit card accounts we have . I was shocked because we have never been late or over the limit ever !! We have been good customers for 10 years , They have wittled away our credit limit to just above what we owe and increased our interest rate to 23.9% , If they are doing this to people that have never been late i cant feel bad about filing BK !!
sorry to rant i got carried away besides feeling like im losing my mind !!

[eddiep]

Don't worry, everyone in your position feels like they are losing their minds. And I agree, if the banks used some common sense and actually helped someone when there were having temporary financial problems instead of pushing them off a cliff there would be a lot less bk and no need for federal bailout programs! Chase raised my 2.99% interest to 29.99% with one missed payment. They had already cut my limit to what I owed so I got hit with over the limit fees late fees and the new rate. My minimum payment went to $2000 in a matter of months. CRAZY!

Have you talked to a lawyer yet? Most bk attorneys will give a free consultation, maybe you should set up an appointment to see what your options are.

It dosen't make sense that you didn't pass the means test but not impossible. What are your actual expenses? Mortgage, tax, insurance, medical, groceries, utilities, car payment and ownership costs, income tax. And ch13 is not as bad as paying cc.

Try this means test http://www.johnfire.com/meanstest/wizard.php

[TEW]

yes , when i did the means test and it is showing that we have $345 left each month to pay for a chapt 13 , I filled out the entire form but maybe i am missing something. But does that mean that even though we were under the median for a 7 that we still maybe be forced into a 13 ? I live in PA and i sure hope we dont have to count the IRA withdraw in the 6 months income we have to report , but i didnt want to get behind on our federal taxes We have enough problems right now , I have a sick feeling in the pit of my stomach because we can not make our CC payments in the next few days, but the money just isnt there , DH unemployment runs out this week and have no idea how long it will take for the emergency unemployment checks to start so things are going to go downhill very quickly !! I feel the mortgage is the inmpotant bill to pay right now. We have never been late on anything before so this is just making me ill at the thought not paying them. I dont know why i should care at this point thou, just yesterday we recieved a letter from Chase mastercard telling us that they are closing both credit card accounts we have . I was shocked because we have never been late or over the limit ever !! We have been good customers for 10 years , They have wittled away our credit limit to just above what we owe and increased our interest rate to 23.9% , If they are doing this to people that have never been late i cant feel bad about filing BK !!
sorry to rant i got carried away besides feeling like im losing my mind !!

I don't think the 401 K withdrawal counts as income I could be wrong if it does you may want to wait 6 months and let it drop off.
the means test is only the first half you need to do schedule I and J to figure your disposable income.

http://www.uscourts.gov/bkforms/index.html

here are the forms

[LaidOff53]

Thanks eddiep & tew , Yes i spoke to an attorney in my area that everyone uses via phone and he just asked me a few questions , I told him that our income right now was above the median even on unemployment and he told me that its a numbers game and we need to be below that median and suggested that we wait until it drops off , He said that the BK court doesnt care that DH doesnt have a job and being on unemployment is over 50% of our income and will end.
He was very nice and straight to the point no bull . He said as soon as our income falls to below the median come see him. I think thats why everyone says he is good because if your under the median i would think its a slam dunk no fuss no muss , and that is what we want . We would have filed 2 months ago but DH had 3 UC checks in April and then i have 3 paychecks this month ( just our luck ) but as i said DH checks run out next week and i am hoping that there is a a couple of weeks lapse before his emergency UC checks start which even thou its a small window it would be enough that we could file , That is of course if the IRA withdraw of 2500 we made last month to pay our taxes doesnt put us over ( again that would be our luck )
If we have to i guess we could try to hang on until another 6 months to file but i am so worried about the CC's getting a judgement against us before we can file, we have 4 cards that are due in a few days and no money to pay them so that will be our start down a slippery slope !! They are doing crazy things right now and i know that everyone says that it takes months before they start a lawsuit but with the amount of people filing 7's im sure that is going to change, i wish i knew the reason chase closed 2 accounts even though we have never been late on them OR anything ever ,I know that the new CC reform will be law in a few days so im sure that has something to do with it . but I havent figured out why they would cancel someone that pays . In the letter they said I would still recieve monthly statements and I could still make at least the min payments or pay it off if i perfered , It must benefit them in some way , now i expect all 11 CC's in total to follow suit when they see that on our credit report. we have 9 more cards and im sure they will all raise the interest rates ( most were already high for no reason ) and slash whats left of credit limits and probably close all the accounts thinking that chase knows sonmething they dont about us . These banks are going crazy !!
also,
i filled out the means test with my mortgage payment ,the utilities and medical and stuff , we own both cars 8 & 9 years old , and our mortgage is 920 per month there is really not a place to add in things like our cable, phone, electric gas ect... I think i did the schedule I & J . i did all on the form.

[aces67]

My attorney said as long as we are UNDER the median there is no means test. The means test allows for expenses such as food, clothing, household supplies, personal care, electric and gas bills for your home, car notes, vehicle maintenance, Healthcare, childcare, mortgage, property taxes and vehicle taxes.

You may be fine. You need to schedule a consultation and let an attorney go over all this with you face to face. There may be something you missed on the means test.

Good Luck!

[SocalBroke]

I can totally understand the rush to get it over and done with but in your case, I would take a deep breath and relax. You really only get one shot at this and if waiting 6 months will improve your odds dramatically, it's worth the wait. In regards to the creditors, I can't imagine anything happening in 6 months if you just started being late. They will try to collect for a month or two, then they will send it to a collection agency which will take another couple of months.....you should have plenty of time.

Also, you should take the 6 months to 'plan' your bankruptcy by reading up on this board. There are a lot of little things you can do to make sure the bankruptcy goes as smoothly as possible and you that don't have little 'loose-ends' to worry about. Don't worry, the lawyer will find a place for the cable, phone, utilities and even a cell phone, That's what they get paid for

[LuciluS]

If you know you will be filing Bankruptcy, Stop Paying Your Credit Cards. We stopped our last Sept. after meeting with our Attorney.

Ys, we had phone calls, but just gave them the Attorney's info. We thought we would have already filed, but we need some income to drop off and will file 9/30/09 using Mar. - Aug. income.

All of our credit cards have been sent to Collection Agencies or Attorneys. I've ignored the letters & the phone calls at the advice of our Attorney.
I think next week, I will call the ones who have sent letters and give them our Attorney's info and tell them we will be filing in the third quarter of this year.

Yes, at first, the phone calls were plentiful, but must admit all of the CCs' who called were nice. I had skin cancer surgery in March and had two CC companies call & want to know why we hadn't filed yet. I told them I had skin cancer & was scheduled for surgery. Both of them wished me well.

I did answer a call from Asset Recovery last week and she was very rude. I finally told her to do what she needed to do as I'm on disability and can't pay (card in my name only). She said I will run an Asset case on you. That's when I told her go ahead. I finally got her to take Attorneys info. After I got off the phone I was shaking. Decided, right then, not to answer phone unless we knew who was calling.

Attorney has already told us if someone (CC co., Collection Agency, or JDB) files a judgement in court, he will file something to delay the judgement until we get our bankruptcy filed. Courts are backed up & Trustees are overwhelmed in our state. This is one time, it 'tickles me pink' they are overworked

Soo, with all of the above said, I feel confident and no longer worry about not paying our Credit Cards. We planning on keeping our home as we just bought it in 12/07 and DH's truck as he is a tall man & some vehicles he can't sit comfortably.

We also have tons of medical bills & our prescriptions cost us over $500 and we both have medical insurance. I know being on Medicare, plus I have a supplemental insurance, you are limited to where you can go. However, I must say I pay less out of pocket expenses than my husband does with his medical insurance company from his employer, who btw pays his insurance. His employer also pays for both of our dental insurance even though I don't have medical insurance with his employer.

Yes, I understand you are wanting to get this BK behind you, BUT you really need to time it where you will be under your State's Median Income. I believe there are a lot of expenses you may be missing. 1 thing is pet expenses, if you have one. Your Attorney will also be able to help you with your expenses.

I plan on seeing our Attorney in early August & let him 'run the numbers' and see what, if anything, he suggests we might need to do.

Wishing You Good Luck

Luci

[Tbornetun]

If you are under the median income in the first portion of the means test, you do not need to fill out any remaining portions. You qualify for Ch 7. The only other area you will look as income/expenses in on schedules I and J.

[LaidOff53]

Thanks for all the info Luci !
( what state are you from ? ) The reccession here in PA is just starting to get bad , Our states housing is holding its value but our manufacturing jobs have really taken a hit . my husband was laid off (permanently) in Nov after 25 years with the same employer ( steel industry ) all the jobs around here now pay like $12.00 per hour , He is making more than that on unemployment !! Its crazy , 2 yrs ago he had uncontrollable high blood pressure 250\155 . it took 8 months to get it under control and now i am so afraid that all the stress and Uncertainty in our lives right now will raise it again, at age 53 he should be thinking about retiring but there will never be any retirement for us . I think thats why i have tryed to keep up as long as i have on the CC's because with 11 credit cards i cant Imagine the amount of calls we will get a day while im at work ( but we will soon find out ) I would like to spare him that stress , i thought that when we got the income down to where we can file we could just give them our attorneys number . this mess has forced me to really look at what is important in life and thats the health of my family . I tell my husband all the time If we lose everything i would live in a cardboard box as long as we are healthy , But Secretly i am freaking out not knowing if we will be able to keep the house , all the years of hard work making it a home only to lose it would just be to much , when im at work during the day i put everything out of my mind , but when i get home thats when the panic sets in . Sorry to ramble so much sometimes i just have to vent Thanks again for for the info and take care of yourself !

[teacher]

Where do you deduct pet expenses from the means test?

If you know you will be filing Bankruptcy, Stop Paying Your Credit Cards. We stopped our last Sept. after meeting with our Attorney.

Ys, we had phone calls, but just gave them the Attorney's info. We thought we would have already filed, but we need some income to drop off and will file 9/30/09 using Mar. - Aug. income.

All of our credit cards have been sent to Collection Agencies or Attorneys. I've ignored the letters & the phone calls at the advice of our Attorney.
I think next week, I will call the ones who have sent letters and give them our Attorney's info and tell them we will be filing in the third quarter of this year.

Yes, at first, the phone calls were plentiful, but must admit all of the CCs' who called were nice. I had skin cancer surgery in March and had two CC companies call & want to know why we hadn't filed yet. I told them I had skin cancer & was scheduled for surgery. Both of them wished me well.

I did answer a call from Asset Recovery last week and she was very rude. I finally told her to do what she needed to do as I'm on disability and can't pay (card in my name only). She said I will run an Asset case on you. That's when I told her go ahead. I finally got her to take Attorneys info. After I got off the phone I was shaking. Decided, right then, not to answer phone unless we knew who was calling.

Attorney has already told us if someone (CC co., Collection Agency, or JDB) files a judgement in court, he will file something to delay the judgement until we get our bankruptcy filed. Courts are backed up & Trustees are overwhelmed in our state. This is one time, it 'tickles me pink' they are overworked

Soo, with all of the above said, I feel confident and no longer worry about not paying our Credit Cards. We planning on keeping our home as we just bought it in 12/07 and DH's truck as he is a tall man & some vehicles he can't sit comfortably.

We also have tons of medical bills & our prescriptions cost us over $500 and we both have medical insurance. I know being on Medicare, plus I have a supplemental insurance, you are limited to where you can go. However, I must say I pay less out of pocket expenses than my husband does with his medical insurance company from his employer, who btw pays his insurance. His employer also pays for both of our dental insurance even though I don't have medical insurance with his employer.

Yes, I understand you are wanting to get this BK behind you, BUT you really need to time it where you will be under your State's Median Income. I believe there are a lot of expenses you may be missing. 1 thing is pet expenses, if you have one. Your Attorney will also be able to help you with your expenses.

I plan on seeing our Attorney in early August & let him 'run the numbers' and see what, if anything, he suggests we might need to do.

Wishing You Good Luck

Luci

[LuciluS]

Laidoff....we live in Arkansas. The recession has not hit our state as hard as the Northern States. My husband spent a week in the hospital this April and was off work for a month. In 2/07 he had 5 bypass surgery & in 6/07 had a pacemaker put in and he was only 50 yrs. old. He has battled with where they stripped the vein in his leg ever since then. It usually acts up every 6 mths. But in April, his started out as flu like symptoms. The day he was sent to the hospital via ambulance he had driven from Mansfield, LA to Conway, AR that morning. He is an OTR Truck Driver. At the doctor's office they couldnt get a blood pressure reading. In the amblance, it was 60/40. In ER they kept tilting the gurney head down trying to get the blood flow to his brain. His organs were shutting down & he only has one kidney.

They ran every test possible on him while he was in the hospital and finally came down with the conclussion it was Severe Cellulitis again. I figured up and he has a bout with it about every 6 mths.

Will pray ya'll get to keep your house. Hubby said to me one day after he got out of the hospital he would be happy as long as he had Me and our furkid, a Shih Tzu & some kind of roof over our head

Teacher: I don't know where it is deducted. There should be a place for Other. At least paperwork given to us by Attorney has a place for Other. You can use the search button & type in 'pet expenses' & see who has deducted in on the expense side. If you are using an Attorney, he will know about how much will be allowed in your District as each is different.

Our district had a ruling (I posted under News) stating those who take monthly IRA withdrawals, it is not considered Income for the Means Test; however, it is income when figure income vs. expenses = DMI. I've not looked at the Schedule I & J yet; thus, reason for not being able to tell you where pet expenses would be listed.

Luci

[trueblues]

DH & I are planning on filing chapter 7 in Oct due to a permanent Layoff 6 months ago, and waiting until an extra unemployment check drops off . (

But unemployment benefits are exempt and not counted as income! On the means test there's a place to include it, but it's then taken off when you come down to total income line. The money he's received from UE won't count in the 6 month look-back.

[frustrated7]

Unemployment counts as income in the 6 month lookback period, at least in Illinois. My husband and I just dealt with this not very long ago and had to wait about a month and a half for our income to drop enough to file under the median because of that.