Not qualified for chapter 7?

[Jkeith]

Spoke with an attorney, he advised we only qualify for chapter 13.


According to a calculator, I’m about 10k under Alabamas median income.


Am I missing something? Is that not a pass / fail type thing?

[justbroke]

Welcome to BKForum.

What calculator did you use? What is your household size? Do you own a home with a mortgage? Do you rent? Do you own a vehicle?

A Chapter 7 debtor could "pass" the Chapter 7 Means Test but could actually show sufficient income on Schedule J to fund a Chapter 13. The Means Test is the first hurdle. Then they look at your income (Schedule I) and your "allowed" expenses (Schedule J). They then take I-J and come up with a disposable monthly income (DMI) number. They then look to your debt and if that DMI is greater than about $250 or pays at least 25% of your unsecured creditors then you are not entitled to a discharge under Chapter 7.

Thing that can affect this are as follows: your actual family size (are you single), whether you are paying a loan on a vehicle (helps with reducing expense), whether you own a home (significant impact on people that are single), whether you are renting (lower allowed nonmortgage/norent expense for smaller family size), and other factors.

You can also talk to 3-4 other attorneys with a free consultation. Many of us on here recommend shopping around to find someone you feel comfortable with and to see if all the answers are the same. If 4/5 say you have to file a Chapter 13... that's probably what needs to be done.

[Jkeith]

Used a few, to include the Ascend calculator.
I made around 98k (around 12k under means), 19 in unsecured debt, 14k on car loan @ 350/month. I do live rent free however.

married with 4 kids.

[justbroke]

Rent free and without a house is likely causing your DMI to be > $250 per month. Plus you only have one car and you're married? I'm not saying to incur debt, but you need to talk to a few more attorneys to see what you can do. Having no rent is an issue, but on the Means Test you'd still include the local rent for a family of your size.

[Jkeith]

Rent free and without a house is likely causing your DMI to be > $250 per month. Plus you only have one car and you're married? I'm not saying to incur debt, but you need to talk to a few more attorneys to see what you can do. Having no rent is an issue, but on the Means Test you'd still include the local rent for a family of your size.

Yeah, if only qualify for 13, may as just well try to pay off.

[justbroke]

When you have the free consultations, the attorneys don't do a deep dive into your finances. When doing the means test they probably should do it as if you your paying rent. Maybe on your next 3 consults you can explain the situation and ask about the housing of if your spouse should have a car.