Do I pass the means test??

[dustinc]

I entered my data into the means test and my disposable income is at least $6575 but no more than $10950 so I had to enter the amount of my non priority unsecured debt. If I include my student loans in this amount then, I pass because my 60 month disposable income is less than the threshold debt payment. Am I okay to include my student loan debt as part of my non priority unsecured debt in this part of the means test? I understand student loans are considered non priority unsecured debt but I am not certain I can include them here. Thanks for the help.

[dustinc]

Anyone know the answer to this one?

[justbroke]

Okay. Whether you can use Student Loans as an expense on your Means Test for purposes of passing it... varies by District. The majority view is that you cannot use student loan paymnets as an expense on your means test.

Now, you can put them on your Means Test and Schedule J, but the Trustee is very likely to object to them and claim a presumption of abuse.

[dustinc]

Thanks for the reply, but that's not what I'm asking. Please see my initial post. I want to know if I can include them in the calculation at the last part of the means test, not include them as an expense. Just whether or not they are counted as part of my debt.

[justbroke]

Thanks for the reply, but that's not what I'm asking. Please see my initial post. I want to know if I can include them in the calculation at the last part of the means test, not include them as an expense. Just whether or not they are counted as part of my debt.

I think you're asking about a presumption of abuse. If you are asking about a presumption of abuse and how to overcome it... read on.

If your monthly disposable income is between $109.58 and $182.50, then your case has a "presumption of abuse". This presumption can be overcome if your disposable income (DMI) times 60 is less than 25% of your total unsecured debt or for special circumstances.

What you are asking is, can you use your student loans in the "unsecured debt" amount for purposes of rebutting the presumption of abuse.

The answer is: absolutely. Student Loans are indeed debt and in fact goes on your Schedule F (Creditors Holding Unsecured NonPriority Claims).

Otherwise, there is nothing on the Means Test to list your actual debts.

Your initial posting was very confusing. We usually don't refer to the disposable income as the "60 months" figure. We talk about it as a monthly amount, which is $109.58 and $182.50. Even so, when someone's disposable income is between those values, we just say that the "presumption of abuse arises". Otherwise, no one understands all those numbers.

[dustinc]

Thanks for your response. That was very well written and helfpul.

[justbroke]

Ask us any other questions you have. There is a wealth of knowledge here!

[bklawn]

[QUOTE=justbroke;325494]Ask us any other questions you have. There is a wealth of knowledge here![/QUOT


justbroke, being that I'm in the northern georgia district, can the trustee make me pay more to the plan if my DMI say a amount and he thinks I can pay more because I have a large house payment that I am keeping in the chapter 13, which the house is under water anyway and my liquid assets are protected in the exempts allowance? What ever the DMI is that is what is paid to the creditors correct? plus frees... Chapter 13 is all about DMI right? If it is 10% payback that is what it is?

[justbroke]

justbroke, being that I'm in the northern georgia district, can the trustee make me pay more to the plan if my DMI say a amount and he thinks I can pay more because I have a large house payment that I am keeping in the chapter 13, which the house is under water anyway and my liquid assets are protected in the exempts allowance?

No, there is no caselaw to support this notion that your home is not required for a successful reorganization... there is plenty of caselaw that it is. I'm in Florida, and we are both in the 11th Circuit. I'm in my home and most of my payment is my home (there's another $1,500 or so outside the plan for taxes/insurance). I had no questions, and I'm paying 0% to unsecured creditors.

What ever the DMI is that is what is paid to the creditors correct? plus frees... Chapter 13 is all about DMI right?

Chatper 13 is all about allowances, debt service, and your DMI. Your DMI -- disposable monthly income -- is paid to the unsecured creditors. Your debt service pays for things like priority debt (IRS), administrative fees (Trustee, Attorney fees in plan), and your payments on secured items (house, cars, etc). Your allowances are the part of your income that is used to pay taxes, for food, shelter, clothing, medical insurance, utilities, and housing.

[bklawn]

No, there is no caselaw to support this notion that your home is not required for a successful reorganization... there is plenty of caselaw that it is. I'm in Florida, and we are both in the 11th Circuit. I'm in my home and most of my payment is my home (there's another $1,500 or so outside the plan for taxes/insurance). I had no questions, and I'm paying 0% to unsecured creditors.

Chatper 13 is all about allowances, debt service, and your DMI. Your DMI -- disposable monthly income -- is paid to the unsecured creditors. Your debt service pays for things like priority debt (IRS), administrative fees (Trustee, Attorney fees in plan), and your payments on secured items (house, cars, etc). Your allowances are the part of your income that is used to pay taxes, for food, shelter, clothing, medical insurance, utilities, and housing.

So the trustee has to use the numbers from the DMI, but I know they will try to find more..Also I see that the change for including 401k and 401k loans are allowed in chapter 13 and not chapter 7 means test Right?.. I'm holding out until jan to file to drop my six month income from 8600 to 7000.. it is crazy how that works.. they go back six months even when you are not making that amount now..I stop paying credit cards about a week ago and they are calling like crazy.. i had to put blocks on my phone and change my number..


thanks just broke

[justbroke]

So the trustee has to use the numbers from the DMI, but I know they will try to find more.

The DMI on Form B22C is a "starting point" for determining your true disposable monthly income.

Also I see that the change for including 401k and 401k loans are allowed in chapter 13 and not chapter 7 means test Right?.

So long as you have consistently been contributing to the 401(k) plan and that you are not contributing "too much". "Too much" is not defined.

I'm holding out until jan to file to drop my six month income from 8600 to 7000.. it is crazy how that works.. they go back six months even when you are not making that amount now..I stop paying credit cards about a week ago and they are calling like crazy.. i had to put blocks on my phone and change my number.

An attorney can always argue that the DMI on B22C is not indicative of the true projected disposable income. For example, my DMI number on B22C was positive $60. However, I had, in my CMI (current monthly income) about $400 in income from my rental property! That skewed everything as I surrnedered my rental property and took no deduction for that mortgage in my secured debt!

So that DMI number on B22C just isn't necessarily your true DMI. Yes, some Trustee's will fight over that number... but it's unrealistic if "circumstances have changed".

Good luck with it. (Waiting for income to roll off, certainly helps reduce the need to fight over the DMI.)