Taking elderly mother in law's income into account

[KAKRN97]

I'm glad that you had the meeting, it sounds like a few things are cleared up for you. Also good to hear that you are under the median so you'll be done with your Chapter 13 in 3 years. Good luck !

Thank you very much! I'm kind of scared about the whole thing.

Now I gotta go to HR at work and increase my witholding so I don't get such a large tax return for 2010. I'm only allowed to keep $1500 and the rest would get turned over to the Trustee. OUCH!

I just wish I would've filed two months ago. BEFORE DH got called back to work, then I would've qualified for CH 7. Know what they say about hindsight being 20/20.

[newbie2]

OK, I'm back from the meeting with the paralegal/attorney
They did NOT include MIL's income in the household income for passing the means test.
They added a contribution of $100 by MIL per month for income purposes.
We have in excess of $1350/month income so I have to file Ch 13. Unless I want my husband to move out of the house for 6 months, hold off on filing for 2 months and not have his higher income held against me and qualify for Ch 7. I decided not to go that route because I'm ok with repaying some of the debts I incurred over the years...Three years and done.
I asked what would happen if DH becomes laid off again. She said to call the trustee and ask about dismissing the CH 13 and possibly converting to Ch 7.

I'm glad that you had the meeting, it sounds like a few things are cleared up for you. Also good to hear that you are under the median so you'll be done with your Chapter 13 in 3 years. Good luck !

[KAKRN97]

OK, I'm back from the meeting with the paralegal/attorney

They did NOT include MIL's income in the household income for passing the means test.
They added a contribution of $100 by MIL per month for income purposes.
We have in excess of $1350/month income so I have to file Ch 13. Unless I want my husband to move out of the house for 6 months, hold off on filing for 2 months and not have his higher income held against me and qualify for Ch 7. I decided not to go that route because I'm ok with repaying some of the debts I incurred over the years...Three years and done.
I asked what would happen if DH becomes laid off again. She said to call the trustee and ask about dismissing the CH 13 and possibly converting to Ch 7.

[neverb4]

Mother-in-Law's income

Okay...let's start at the beginning...

Do the Debtors pass the means test on their own account? Meaning, on their own income, and their own family size...

Next: If they pass, then how much over/under are they on the means test?

If they are under, look at the "contribution" of the M-I-L as rental income.

If they are over, start to consider special (mitigating) circumstances.

Please advise, and let's try to figure something out that makes sense.

Kindest regards, and best of luck!

[newbie2]

I am not an attorney. I am a Paralegal, and a former BK Trustee's assistant.

Here is the critical question, as far as I can see: Are you claiming her as a dependent for tax purposes. If not, well...I'd call her a roommate.

I think it would be a misrepresentation to call her anything (or anyone else) because she is not responsible for your bills; frankly, as I understand your question, she is not the reason for your debt, either.

Seriously want a more detailed answer? I could do some research...

She is claiming her mother as a member of her household for means test purposes. This is where the confusion is coming in to play.

[KAKRN97]

No we do not claim her as a dependent for tax purposes. We just claim the 3 of us, me, DH and DS.
I just got off the phone with the paralegal and she's only considering $200/month from mother in law as income(what MIL contributes to groceries) The rest of her income is not being taken into consideration.
Now, we passed the means test but now that my husband is back to work there's an extra $1000/month income that's not accounted for in monthly allowable expenses so I can't file CH7...looks like I'm gonna be made to do Ch13 but will only have to do it for 3 yrs since I pass the means test.

[neverb4]

I am not an attorney. I am a Paralegal, and a former BK Trustee's assistant.

Here is the critical question, as far as I can see: Are you claiming her as a dependent for tax purposes. If not, well...I'd call her a roommate.

I think it would be a misrepresentation to call her anything (or anyone else) because she is not responsible for your bills; frankly, as I understand your question, she is not the reason for your debt, either.

Seriously want a more detailed answer? I could do some research...

[newbie2]

I guess I can see taking $500 into consideration but not $1784/month! MIL has her own car insurance, health insurance, gas, toiletries, clothing etc to purchase as we don't provide any of that for her. I gave the clerk a list of her expenses this am and will discuss it further with the paralegal later today. I've got a whole list of questions and I'm sure she's got further questions for me as well.

They may have to list the full $1748 of her income, but they also will deduct from that her own expenses. Some attorneys just put in the amount that is contributed to your household, others list things as money in / money out.

[KAKRN97]

I guess I can see taking $500 into consideration but not $1784/month! MIL has her own car insurance, health insurance, gas, toiletries, clothing etc to purchase as we don't provide any of that for her. I gave the clerk a list of her expenses this am and will discuss it further with the paralegal later today. I've got a whole list of questions and I'm sure she's got further questions for me as well.

[newbie2]

She buys groceries in lieu of paying rent..no different than a roommate.

I understand that. But you said she contributed $500 of her income - it doesn't have to be in cash to be contributed. (She is in essence knocking $500 off your grocery budget). The para is looking at the extra income and adding it in, and rightfully so according to the bk rules. Good luck with your meeting and let us know how it works out for you.

[KAKRN97]

Well, I'm off to the lawyer's office this am.

[KAKRN97]

No, she's not responsible for your debts, but you do receive income from her. Hope it goes well for you today when you talk to your attorney.

She buys groceries in lieu of paying rent..no different than a roommate.

[Universal]

Very interesting points and questions. Please keep us updated after you meet with counsel.

[newbie2]

See, that aint right because she is not responsible for my debts.

No, she's not responsible for your debts, but you do receive income from her. Hope it goes well for you today when you talk to your attorney.

[KAKRN97]

See, that aint right because she is not responsible for my debts.