Filing Ch. 7 with "Special Circumstances"

[melissah34]

A motion for abuse is something to avoid if possible and that is why we suggested that the OP not file with "special circumstances".

Don't I know it, from experience! I agree that if you are reasonably sure that you will have a chance in a reasonable amount of time to file without the presumption then by all means it's best to avoid it.

To answer your question, clevelandmom, we were $8,000 a year over median income and using our old income versus expenses we were $3100/mo. over (we have very low expenses w/out debt!) The attorney used just our unemployment on schedules I and J so that shows negative. Our attorney was very confident in filing and said that they do it quite often. I guess my thinking was that we had no idea how long the unemployment would last and no idea what kind of job he could get and this way we had a chance at a chapter 7. It would have taken a couple months at least to get us below median. If we got converted because of a job that was too good then we would have had to file a chapter 13 anyway if we waited or if we didn't. So after weighing our options, that was what we chose and it worked out for us.

[clevelandmom]

Hi Tom - I did have the conversation at the very beginning when I first hired the attorney and they said yes, the court DOES include unemployment compensation as income.

[tcreegan]

Hi again clevelandmom,

Did you ask your atty about In re Sorrell, 359 B.R. 167 (Bankr. S.D. Ohio 2007)?

What did they say?

Tom in Colo

[clevelandmom]

Hi again everyone. Thank you so much for posting your responses. I will clarify a couple of things:
First, I'm sorry I confused you all thinking that my atty is looking back a whole year. She is not. I just meant that my husband started working at the beginning of the year (after being laid off for 6 months last year) and he worked until August. Right now our "look back" is May through October. So for the months of May through mid-August, he and I were both working. Second, I am so ridiculously screwed when it comes to using anything for medical. He is in the union, and they take almost $900 per month out of his pay pre-taxed for our health insurance. The monthly fee is high because there is a certain amount "banked" every month to cover him for the months he is laid off (like now). Also, part of that money goes into a fund that we can pull out for anything we need - like co-pays, prescriptions, anything dental, etc. So when it comes to medical anything, we are already 100 percent covered. I have been reading these boards and there might be one or two things we didn't include that I'm going to try because I want to get that number down. I also wonder if our attorney realizes that the unemployment checks my husband is getting are withOUT taxes taken out, so we need to include a percentage every month to pay taxes on that money, if they haven't already.
Melissa: How much over median were you when you filed? Thank you all so much for your responses. We are meeting with our atty on Monday to file, and we really HAVE TO file Monday because I will be garnished on Tuesday if we don't. Hopefully when we go through the numbers on Monday, we can magically find something we missed. That $135 over is such an untruthful number. Right now my husband and I are easily -$150 per month.

[backtoschool]

We were over median but husband was fired. I stay at home. We used special circumstances of unemployment and we got through. My husband did get a job right after the 341 but we are under median now. The UST did file a motion for abuse. They did ask for current income statements after the 341 but determined that income was not at the same level so determined abuse was not appropriate. We were certainly on pins and needles the entire time but we made it.

A motion for abuse is something to avoid if possible and that is why we suggested that the OP not file with "special circumstances".

[melissah34]

We were over median but husband was fired. I stay at home. We used special circumstances of unemployment and we got through. My husband did get a job right after the 341 but we are under median now. The UST did file a motion for abuse. They did ask for current income statements after the 341 but determined that income was not at the same level so determined abuse was not appropriate. We were certainly on pins and needles the entire time but we made it.

[Pandora]

Dont forget to include any and all deductibles you have to pay for health insurance / rx coverage! Many people forget about those.

[2manybills]

Clevelandmom, what I would do is contact your attorney, ask him why he is going back more than six months on your wages. Then go through your numbers like everyone here is saying. Also, how is your Schedule J coming out? That is also important. Another place that our attorney included an expense is under "Telecommunication", he put $50.00 of our cell phone bill in there. If at all possible, I would not file under special circumstances, nor would I allow my wages to get garnished. Check with your attorney, there also should be laws in your State about filing a "Claim of Exemption" on the wage garnishment should your wages get attached. Since you are the only person working at this time, that may help also.

[tobee43]

Claiming tithing when you have no receipts and have no history of tithing is a huge red flag for the US trustee.

it not only is...we HAD to produce actual receipts and attach them to the petition!!!!

[backtoschool]

I know that you can legitimately claim up to 15% of your income for charitable/church contributions.
Flue shots and shingles shots if not covered by your insurance would easily do it ($25 x2 for flu and about $150 per shot for shingles.)
Do you have two cars? Allowed expenses for 2 cars is pretty amazing.
Did you put the payout for the judgment on there?
NOLO is pretty good about letting you know what you may claim based on your zip code. There are but a few places where you can fill in what you want.
Do the NOLO means yourself and see if it still comes out too high.
Good luck and pass the wine!

Claiming tithing when you have no receipts and have no history of tithing is a huge red flag for the US trustee.

[tcreegan]

Hi Clevelandmom,

The online calculator is great, but if you're like me and prefer pen and paper go to:

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx

and get form B22A

Just to clarify; are you within $135 of median income after taking the deductions?

Finally, courts have split over the issue of unemployment being income on the means-test or not. If it is not counted, that would help your case, right? Mention this case to your lawyer:

In re Sorrell, 359 B.R. 167 (Bankr. S.D. Ohio 2007).

This was among the 1st cases saying unemployment is NOT included in the means-test. It was a case in Ohio, so your lawyer/trustee/judge should be aware of it. Ask if you can exclude UI in your court.

Hope this helps,

Tom in Colo

[CoBelle]

I know that you can legitimately claim up to 15% of your income for charitable/church contributions.
Flue shots and shingles shots if not covered by your insurance would easily do it ($25 x2 for flu and about $150 per shot for shingles.)
Do you have two cars? Allowed expenses for 2 cars is pretty amazing.
Did you put the payout for the judgment on there?
NOLO is pretty good about letting you know what you may claim based on your zip code. There are but a few places where you can fill in what you want.
Do the NOLO means yourself and see if it still comes out too high.
Good luck and pass the wine!

[backtoschool]

Wow, you guys have me a bit worried now. What is my alternative then? I am going to get garnished in 2 weeks, so I REALLY need to file now. What should I do?

Here is the means test calculator used by people who file pro-se. It is often linked to on this forum.

http://www.legalconsumer.com/bankruptcy/nolo/

Play around with various scenarios for the numbers and see if you can eliminate that $135 legitimately. Without you posting more details of your expenses, we really can't give you specific suggestions. As I mentioned in an earlier post, you can look at what others have posted for their expenses by searching on "means test" and perhaps that will give you an idea, but in order for us to give you more specific suggestions we would need to have more information.

[clevelandmom]

Wow, you guys have me a bit worried now. What is my alternative then? I am going to get garnished in 2 weeks, so I REALLY need to file now. What should I do?

[backtoschool]

Some overlooked legitimate expenses for your schedule include:

1. Medication including over the counter medicines
2. Dues and all types of insurance including health, life, home, fire, auto, personal.
3. All medical expenses including eyeglasses, dental appointments, chiropractor, therapy, physical therapy.
4. Home association dues

If you do a search on "means test" and/or "schedule J expenses" you should come up with some idea of what others are claiming legitimately. On another note, if you do a search on "special circumstances" you are going to see a lot of US Trustee drama and dismissed cases.