Means Test

[wheezer47cat]

Could someone help me understand how means testing works?I went to an attorney to discuss a possible bankruptcy filing and am now more confused than ever.We make less than the state median as far as income goes but the attorney figured us paying $1300.00 a month,five years,I suppose this includes the house payment of 917.54 which we are now 30 days behind on and 383.00 for the unsecured creditors,etc.He said he could see no reason for the debt. made me feel like an idiot for even getting to this point.We do not want to keep the house as personally I think a couple of refis are what got us to this point.Do we even have an option for a Chapter 7?

[FoolAndHisMoney]

If you are under your states median then you should qualify for a chapter 7. It sounds like for whatever reason your equity loans and possibly your mortgage will be in the chapter 13 plan. You must have more equity in it then your state allows so you would have to file a 13.

Don't have enough info to help you. Do you have a lot of equity in your home? Do you have a boat you want to keep or a car that's worth something that is paid in full? The chapter 13 would help you keep some of these things that you would lose in a 7.

Regarding this statement "He said he could see no reason for the debt" find another lawyer that will help and not judge you. If he said that then he's stupid. Our financial mistakes are the lawyers gain. Last thing a bankruptcy attorney wants is a perfect society.

If you dump the house and are under the median then you will qualify for a 7 based on the information you gave.

[wheezer47cat]

Thanks for the reply.No boat, only one car for 2 people,a 2000 daewoo lanos,no equity in home to speak of ,owe about what it's worth.We have one mortgage that we refinanced to do some home repairs.payments went up from 705.00 including PITI to 917.00 not including PITI,bad judgement on our part I realize,but I'm so depressed I really don't need a judge.Too many credit cards,again bad judgement,but has anyone ever owned a moneypit?The guy has a degree in economics and is a Chapter 13 Trustee,thought he would be a good one but all he seemed to dwell on was what happened not any way to get out.I asked what if we just surrendered the house and he said the trustee would just want more money.Thanks,again.

[aa06a47]

I think this lawyer may be looking at his own best interest (fee's, ect) instead of your best interest. You should qualify for a chapter 7, no question about it. The only reason you would want a chapter 13 is if you plan on keeping your house (which you mentioned was in the arrears). No other reason. Good luck, and by all means, find a new lawyer.

[SinkingFast]

Probably the attny was thinking you wanna keep your house.

Ch 7 is Liquidation. With you being in arrears on your mortgage payments, there's no way to go Ch 7 and keep the house. Even tho you are below the Median.

You need to give some serious consideration as to whether you really want to stay in that house or not. Beyond does it suit your needs, you like the neighborhood and schools, you love the house, etc,........ You also need to consider your financial situation. Has the house and associated costs been the driving force behind your current financial situation.

If you decide you can let go of the house, you can file Ch 7. If you decide you must keep the house, then you will have to file Ch 13.

Schedule more Consult appts. Chat with more attnys. Get more input. And think about your financial situation as well.