queston on means testing

[jenski]

the irs allowable housing/utilities expense for my county in colorado is $1073.

good lord, that doesn't even cover my house payment.

my first mortgage payment is 2100 includes taxes, insurance

2nd is 583.

what happens in a case like this?

generally speaking.

i think we'll be chp 7

[tallberry]

I just met with my attorney yesterday to finalize paper work and we talked about this exact thing. Basically, the IRS allowable housing/util expenses are what they use to complete the means test. So if you are over the median but have under $100 when they compare your income to the IRS allowable expenses, car payments, etc. than you can file ch7 because the presumption of abuse would not apply. If over $166, you go ch13. Your "real" expenses are used when you are in Ch13 and comparing the I and J schedules to see how much disposable cash you have for your ch13 payment. Anyone, please feel free to correct me if I am wrong.

[getouttathehole]

That is incorrect.You can use your actual expenses when it come to housing on the means test. The only possible problem is the trustee could challenge due to totality of circumstances if they think your mortgage payment is too high and possibly force you into a 13. The best thing to do is go see a lawyer or two and get their opinions.

[Knew_it_all]

That is incorrect.You can use your actual expenses when it come to housing on the means test.

Not entirely correct..to wit: If you are renting, you can ONLY use the standardized IRS housing costs, not the actual rent you are paying. Why? I have no idea...

[tallberry]

That makes sense then why my attorney gave me the info I shared, I am renting PLUS I have a mortgage on a home in IN that we are relinquishing. Attorney said that Ch7 is a snapshot of your financial situation the day you file. Ch 13 is more of the day you file AND looking forward from there. He said we could attempt to use our mortgage amount on our means test but said some trustees won't allow it if you are going to relinquish (even though you are financially obligated as of the day you file). My opinion, they need an official play book (like little league) instead of the trustees deciding whether they want to use certain rules or not.

[getouttathehole]

Sorry, I should have clarified mortgage payment. I was just concentrating on the OP's question and not thinking of other situations.

[tallberry]

It's all good, getoutta, the things I have learned from everyone on this forum has been absolutely priceless. I felt very confident going into my attorney's office the other day because when he started talking in his "legal jargon", I knew what he was talking about and even questioned him on some comments he made that I was right and he was wrong on!! Very empowering! He has been trying to push us into a Ch13 from the beginning when we clearly qualify for a Ch7. He finally backed down, because he realized we weren't just taking his word for it (being in our best interest). Now, remarkably, he feels we are in great shape for a Ch7....funny how that works!

[jenski]

i found a link to a means test in the links for members section.

IN-bloody-VALUABLE.

i filled it in last nite and came back with 100% payback on 70000 of unsecured debt over five years. it bummed me out. i redid the test today and found that I had only considered one/half of our monthly income taxes - yikes.

that made a huge difference. i even put our car liability at less each month due to the fact that it won't take 60 months to pay either one of them off.

we pass the means test. initially, no presumption of abuse. and we have no disposable income for a chap 13. so it looks like, initially, anyway that we'll be filing chp 7.

(oh, and i found out my answer to my question about the housing expenses that i originally posted up above)



thanks everyone for replying and thanks for them great links.

woohoo.