Link with some good info

[sportster]

http://www.bankruptcyrep.com/the_new_law.htm

Has quite a nice list of what has changed.

[StaciMM]

Very interesting-especially the part about the automatic stay expiring no later than 45 days after the 341 if there is no reaffirmation.

[SinkingFast]

5. There is a substantial change to the budgeting process used to determine the all important "disposable income" in Chapter13. "Disposable" as in "you have to commit all of it to the Chapter 13 Plan." This is also the budget process used for the means test. Now Internal Revenue Service Standards are to be used for budget items like housing, transportation, and personal living expenses, rather than actual and historic expenses of the individuals involved. Necessary secured debt payment, tax payments, and 401k loans are allowable, the latter is new to the cases under the New Act.

We went thru that part yesterday with an attny. I guess he was playing "Devil's Advocate" with our expenses list. But he made us justify each item that was higher and why we spent more in a certain area. Some he lopped off $ amounts here and there. Others he added amounts to 'cause he didn't think we had put down enough.

From having looked at the chart, he did take us down too much on food. I had down $1100 for food. That's what we paid last month. Family of 5 for BK purposes. He lopped it down to $700. But if you look at the Standards chart, we are allowed $868 for 4 plus a portion for the 5th person. Doing the math, I came up with $976/mo for food off the National Standards chart.

The attny contested cell phone, but left it on. I guess that could fall into the miscellaneous category.

I need to take his expenses sheet and go back and redo our amounts.

[sportster]

Did you encounter this problem on the means test (or whatever they call the Chap 13 version), or on the Schedule J, or both?

[SinkingFast]

We are currently under the Median on the 6 month averaging thing. So the Means Test wasn't an issue. Even at Hubby's new salary, we are only barely over the Median, so the Means Test is still not an issue for us. Since we still own our house, and are responsible for it, we can deduct the mortgage payment in one of the "Priority Payments to Others" categories. He also said we can deduct paying son's tuition for college in the Education section. Plus,....... We owe Federal Income Tax for last year, and that will get figured into the Means Test as well. So no problem with the Means Test.

The attny said beyond the Means Test, it's all about I and J. He looked at the income sheet we filled out. No problem there. Then we went over J. According to the attny, you can pass the Means Test and still have disposable income.

He grilled us royally. He knew I'd been researching BK so he asked how much the Standards Allowable for Rent and Utilities was. I said $969. And he pointed to our rent, $1400/mo. He asked why we spend that much for rent. We explained how we wound up in this house. Why we chose this house over another one that was available. The attny let the rent stand. I guess he felt our reasons were justifyable and possibly would stand up when questioned by the Trustee or Judge.

He went thru our entire expenses sheet like that. He said the Means Test was nothing. It's just an indicator of whether or not the filing looks like abuse. The attny said it all comes down to I and J.

The attny also said that things have slowed down now. Since the Courts have cleared the pre 10/17 filing rush. Judges and Trustees now have time to look at the New Law more thoroughly, consider it's application, and to go over filer's petitions with a fine toothed comb, so to speak.

The attny also said, sometimes, under the old law, he'd have a client that was borderline 13/7. He would take the case in as a 7 just for the heck of it to see if he could get it. Now, he won't do that. It has to be a clear cut 7 or he won't proceed that way. He'll go 13 now if he feels there is anything that could throw the case from 7 into 13.

[sportster]

Did he say what amount of disposable income on J looked ok? In my case, we are married not filing jointly. My income is counted, and it seems a bit unfair that I cannot account for my own expenses/obligations on J. So, trying to get the overall expenses to match the income is the plan. We have an appointment with an attorney on Friday.

[SinkingFast]

After he got done adjusting our expenses to where he was satisfied with them, we came up right at Hubby's net. In our case, I equals J. Not exactly to the penny, but very, very close. He marked Ch 7 on the corner of our paperwork, told us some stuff to do, wait some time for somethings to clear off other paperwork we'd filed in, and come back and see him in about a month. Actually more like 6 weeks or so.

We need to empty out our bank acct. Pay for everything with Money Orders from now on. We are already doing that. Started with rent this month and been paying everything I used to write a check for that way. Any excess, be sure and spend on necessities. We have auto insurance coming up. That was a good one. He said go buy some clothes if needed. Absolutely NO trips to Vegas! LOL

The $600, aggregate to unsecured creditors is a problem area for us. We need to wait until our December payments are at least 60 days old. That will let November drop out of the 90 day time frame and then we're in the clear. We paid all our CC's up thru December and had several unsecureds payments of $600 or more when Oct, Nov, and Dec were combined. He said all that money is money the Trustee can go after and recover from the unsecured creditors. When there's as much as we had listed, it would make the Trustee look more closely at our assets, ie, cars. Those payments would make the Trustee wanna sell vehicles to get more money essentially. I guess a bit of money on paper would tend to make the Trustee greedier.

[sportster]

When you mention J matching your husband's net income from I, does that mean you have no income? Just trying to figure this all out.

[SinkingFast]

Sched I is your income statement. Sched J is you expenses statement.

We have income. Hubby get's paid. Our I to J matched very close.

[SinkingFast]

We live in a different state now. Been here long enough to have to file here. We do, however, have to use Missouir exemptions due to the New Law. We haven't been in the new state for 2 years yet.

Sorry. Can't help you there.