Pell Grant Refund - Schedule I

[BrokeJoke22]

Hi,
I am a 2 person household, me and my daughter(full-time college student) and my daughter is getting a Pell Grant refund check of a little less then $600 because she is no longer living at the dorms. I posted originally in the chapter 7 board but thought since I hope to file PRO-SE that I should post here as well. Tcreegan and Flamingo(thanks again) explained to me that I would need to declare the refund as income. I know I would declare it on the means test which doesn't bother me as I am $2000 below my state median, but would I also have to put it on my schedule I?

[ccsjoe]

BrokeJoke22,

Timing and frequency become the question here. Will the grant be received prior to or after the filing? If prior to, include on means test. If after, s it a one-time deal or systematic? If systematic, definitely place on Schedule I. If one time, do not. There is a line item on one of the schedules that allows you to enter anticipated receivables that do not count as income but rather assets. Then you can use your exemptions to exempt the receivable if you have enough available.

I am presuming that you have determined that your daughter is to be included as part of your household for filing purposes, hence you are considering her income.

[BrokeJoke22]

Thanks for your quick response.
My daughter will receive her refund before I file and she is included as part of my household. Also this is a one time deal, next semester will be her last and we don't anticipate her getting anywhere near this amount next year. She won't be a full-time student next semester which will lower her Pell Grant award. Also in Oklahoma there is no cash exemption so if it wouldn't be considered income we would have to spend it on necessary expenses so the trustee couldn't take it. Correct?

[ccsjoe]

Well, here's the thing. If she receives before you file, it goes on means test and without a cash exemption or a wildcard to cover bank account balances, yes, you would likely have to spend it on necessities prior to filing so it is safe. As for the next and last disbursement that will likely be less than this one, you include it as an expected asset and attempt to exempt it. If you can not exempt it, you can hope that the amount will be low enough that the trustee will not want to bother with it. Actually, I personally think that even the $600 one is low enough, but that's only my opinion, I do not know your district's trustees' tolerances.

[BrokeJoke22]

Okay I think I get it. It's just like how I would put my Anticipated 2010 Tax Refund on Schedule B under "other liquidated debts owed to debtor including tax refunds." I would put under "current value" -undetermined-, Right? I won't know how much the next refund is until the school tells us, next semester.

Also I have just 2 more questions and I promise ;) to leave you alone. LOL!

1) Would I take the pell grant refund and put it on the Means Test and Schedule I as the total $600 or would I prorate it i.e. $600/12 = $50/month?

2) On my Schedule J the wording says "Complete this schedule by estimating the average or projected monthly expenses of the debtor and the debtor's family at time case filed."

Does that mean I can use future expenses? I would like to buy health insurance and life insurance but don't know if I should buy it before I file, using pell grant money, or add it to my expenses and buy it after (before 341 meeting). Are new expenses okay if there considered necessary?

If your still reading all this your a saint.

[ccsjoe]

Yes, I am still apparently reading...lol.

You need to estimate the value in order to exempt it. You can't exempt an undetermined amount. If you think it will not be over 500, then estimate it at 500.

1. It would be 600/6 = 100/month. Remember, lookback for means test is 6 months, not 1 year.

2. Very clearly stated, buy it before you file. Projected monthly expenses applies to what you expect you will have to pay, not incurring new expenses. So if you buy prior to applying, then it is no longer a new, but an existing and recurring expense. I don't think waiting to buy post 341 this would fly at all with the trustee for purposes of allowing the expenses on J. My attorney told me to buy health insurance prior to filing in order to claim the monthly premium on our J. Additionally, there are premium implications for you when purchasing life insurance associated with risk due to filing of bk.

[BrokeJoke22]

THANK YOU!! CCSJOE you are the best!

I think I will just estimate the next refund at $600, the same as now, just to be safe. My daughter says she won't need to be a full time student next year but the way I remember college there was always some class that we as students always forgot till the last minute (guilty) and was a requirement lol.

Also thanks for the heads up on new expenses. That part on schedule J had me scratching my head. I can buy me & my daughter health insurance for around $205( can get a low end dental plan for an extra $60) plus life insurance. The deductible is high but it's better then nothing. I am hoping there will be enough left over to buy me and my daughter a pair of decent glasses we've been using readers from Walmart for the past 2 yrs.

Thanks Again(third times a charm) for your help. With the Nolo book and this forum I am feeling pretty confident that I can file on my own. I think .