Median Income

[ProjMgrNewb]

Hi All...

I am in the process of plotting how I'm going to do my bk re-file... knowing that usually in the September/October timeframe the Median Income gets adjusted, I am thinking of waiting until then in hopes that there will be an increase. I originally filed in Feb, and was over Median, but had I waited until March when the adjustment was made, I would have been under.

So, here's my question... with the economy in the crapper like it has been, is it possible that the Median Income will be lowered? I looked over the Median Income for my state over the last couple of years, and there was once, maybe twice, when it was lowered by a few hundred dollars. Should I file soon (before the normal adjustment), knowing that I am under now, or would it be worth waiting until October when the adjustment usually happens.

Thanks,
ProjMgrNewb

[doingpoorly]

When planning my bk I thought about this very situation. I don't have a crystal ball and don't know anyone who does so knowing what the future holds isn't possible but based on how things have played out here in FL I am not betting on the fact that the median will be raised. I wouldn't be surprised if it drops. I am not a gambler, that is for sure, and I will be filing in the next 10 days. I may have an easier time of things if I wait AND the median increases but if it were not for bad luck I wouldn't have any luck at all....thats why I am not willing to wait it out and see.

[OhioFiler]

Hi All...

I am in the process of plotting how I'm going to do my bk re-file... knowing that usually in the September/October timeframe the Median Income gets adjusted, I am thinking of waiting until then in hopes that there will be an increase. I originally filed in Feb, and was over Median, but had I waited until March when the adjustment was made, I would have been under.
So, here's my question... with the economy in the crapper like it has been, is it possible that the Median Income will be lowered? I looked over the Median Income for my state over the last couple of years, and there was once, maybe twice, when it was lowered by a few hundred dollars. Should I file soon (before the normal adjustment), knowing that I am under now, or would it be worth waiting until October when the adjustment usually happens.

Thanks,
ProjMgrNewb

If you are that close to the median I wouldn't be too concerned with the results of the means test if you don't have enough to fund a C13. If the adjustment to the median would have kept you below the median you were very close as the Ohio change was not much.

The updated median incomes are announced at least 2 weeks before they are effective. If you need to file in the 2 week window be prepared.

[justbroke]

I don't know why people plan their Chapter 7 Bankruptcy around being over/under median income. A Chapter 7 is not based on being over/under median. It's based on you not having the means to afford to pay back creditors at least some dividend (in a Chapter 11/13).

Your disposable income (gross income less allowable expenses), is what allows you to receive a discharge in a Chapter 7. Most people who are over the median income are able to receive a Chapter 7 discharge because of their expenses. On the contrary, an under-the-median income person could still be forced into a Chapter 13, due to lack of expenses. (It's usually unlikely, but it does happen often.)

Remember, your (allowed) expenses are the most important thing to receiving a discharge in a Chapter 7.

I say... if you "pass" the Means Test, it's by a good amount (negative disposable income), you used defensible values for expenses... don't worry about being over the median! Sure, you'll get a better look, rather than a glance, from the U.S. Trustee, but the Bankruptcy Code does not prohibit or even discourage a debtor from receiving a discharge under Chapter 7... just because they are over the median.

[ProjMgrNewb]

The reason why i'm hung up on the under/over median thing is because most lawyers in this area want to shove you straight into a 13 if your over median. Finding a lawyer that wants to actually do work and look at the numbers is like finding sasquatch. My previous attorney actually did that, but well, that ended badly, hence the refile.

Plus, I already had the US Trustee all over my case in the previous filing, I'd like them to leave me alone this time... all Chp 7's above median (if you can find a lawyer to help you get there) in this area are heavily scrutinized by the UST.

[justbroke]

The reason why i'm hung up on the under/over median thing is because most lawyers in this area want to shove you straight into a 13 if your over median. Finding a lawyer that wants to actually do work and look at the numbers is like finding sasquatch. My previous attorney actually did that, but well, that ended badly, hence the refile.

Well, you need to find BigFoot then. You never mention why it ended badly? What was the amount of unsecured debt you were attempting to discharge? Not that it matters... but how far over the median were you? What types of allowed expenses do you have (home, cars)? What's your family size?

Plus, I already had the US Trustee all over my case in the previous filing, I'd like them to leave me alone this time... all Chp 7's above median (if you can find a lawyer to help you get there) in this area are heavily scrutinized by the UST.

The UST was all over your case for something else then. Perhaps you were attempting to discharge near $100K (or more) and that's what gave you a closer look. What i'm saying is that all chapter 7 cases that are discharging significant unsecured debt are also heavily scrutinized by the UST. It won't matter what your income level is.

[ProjMgrNewb]

Okay.. didn't want to rehash what happened with my case as I had posted it already a while ago (didn't want to bore folks), but here's the cliff notes version

Issue #1 -- Lawyer put $85k in Student Loan debt in as a priority claim. Shouldn't have been there. This is what had me into the Chp 7.

Issue #2 -- Lawyer recommended that I give up the lease on the Jeep I had prior to filing and have a family member or a friend get me a car. The rationale was that since there was a year left on the Jeep and I was going to have penalties (damage/mileage), that by giving it up the amount owed would be unsecured debt and would be included in the BK. My boyfriend financed a vehicle for me. But, because the car and loan is in his name, I can't claim in in the means test or as an expense, even though I pay for EVERYTHING for this car.

Issue #3 -- Paperwork was botched in many areas. This is something I didn't realize until Issue #4 came about...

Issue #4 -- So, Issues #1 and #2 came to light 15 minutes before my 341. I was a hysterical mess. So, the infamous words my attorney left me with after the hearing were... "I'm not going to leave you hanging on this, I'll be in touch with you soon." It took me a week and a half to pin him down to schedule an appointment to figure out what I was going to have to do next. The day before my appointment... The FBI arrested him on obscenity charges. Yep. It was all over the news. He was on the 'net talking to who he thought was 12/13 y.o. girls.. sending explicit material.

I "interviewed" four attorneys since then... Attorney #1, I was sent to by the firm that the now-arrested attorney had worked for. This attorney wanted to shove me into a 13, not look at any of the paperwork, and was only handling the case as a "favor" because he was friends with the arrested attorney. Attorney #2, he YELLED at me in his office because of the state of the case. Attorney #3 Suggested that I let the case get dismissed, move out of my b/f's house (we share expenses), and create expenses of my own... which I was kind of okay with, but after a while I was thinking that it's not a good idea because that's not how I live nor how I intend to live. Attorney #4 was very wishy washy about the whole thing and couldn't offer a lick of advice.

So, now I'm stuck. I'm in a rush to refile because right now, it looks like I'm under median (trying to stay under the radar this time), and because I have a security clearance I'm trying to show that I'm mitigating the issues with my financials... my clearance has been under re-investigation because of this situation.

The biggest sticking point right now is the deal with the car... I couldn't get a loan right now if I offered up two kidneys and a first born (if I had one). I can go into more detail with you offline, for the expenses, etc. As for what was going to be discharged, it would have been around $50 - $60k unsecured. I own no property. I have $85k in school loans, and owe $5k in back taxes that I know weren't going to be discharged. I have some unique expenses with regards to medical and my profession that I have no idea if they can be considered.

If I'm a Chp 13, Chp 7, Chp whatever... I don't care. I just want an honest attorney that is going to get me through this and help me with getting my numbers right this time.

Thanks!
ProjMgrNewb

[justbroke]

That was very detailed enough. I think I remember parts of that from before, but this certainly brings it back to the forefront for me.

Your first case was, in fact, botched! I don't know why lawyers continue to attempt to list student loans as priority unsecured debt. It is not entitled to that classification as there are very specific rules around what gets priority status. Reads like your first lawyer just messed everything up for that Case. Sounds like he was too inexperienced because even I know those things. But that's just me mumbling.

Your issue is still going to be on expenses, regardless of any "interest" by the UST. The case Trustee will still run numbers on your case to see if your expenses are in-line with the Code, local customs, and local rules/guidelines.

Since your old case is closed/dismissed, new attorneys should be more willing to help with this case. However, they are still going to look at your income and expenses. it's absolutely true that many attorneys take one look at your income and decide whether they'll file Chapter 7 or not, purely based on over/under median. This seems to be that these attorneys just don't want to "fight" or get into arguing with the Trustee. If you want to be in a Chapter 7 and are qualified to receive a discharge in a Chapter 7, then find the lawyer who will take such a case. The fee will probably be higher when you are over-the-median and it appears a fight with the Trustee will ensue.

But, don't be discouraged. Many folks have interviewed many attorneys before finding the right one.