How much power does a trustee have over dismissing your case and how likely is it?

[djd]

If there are mistakes on the schedules, for instance, can the case be dismissed even if there is no intention of fraud? how likely is this to happen?

If I have too much disposable income even though I pass the means test and qualify for chapter 7, what will happen?

[frogger]

How much power? Almost unlimited.....

[rdknipp]

In my experience, if there are mistakes on a schedule the trustee will let you amend them.

The means test is just the starting point. It creates a rebuttable presumption one way or the other as to whether you qualify for a chapter 7. If your schedules I & J show an excess of available income, the trustee/us trustee can require you convert to a chp 13 to pay back some of your creditors or dismiss your case if you do not.

[AngelinaCatHub]

It all depends on what mistakes and how skewed your figures may have been. Correct the known mistakes. As long as you play it clean, mistakes are no sin. Also as stated, the Trustee just about Owns you and all your stuff until your discharge and close. It is not too likely you will have a problem as long as you cooperate and give him all the info to the best of your knowledge. 'Hub

[justbroke]

The Trustee is the king in the Bankruptcy! The judge is just there to adjudicate "disputes" and differences, but the Trustee (and United States Trustee) administer the process. If you have mistakes, the Trustee (or UST) will ask for corrections. If you don't make the corrections, they can do something really really punitive. That is to seek a dismissal of your case with prejudice. that means you can never discharge those debts ever... even if you file bankruptcy years later!

So, don't ever get on the bad side of the UST or Trustee.

[df04527]

wow

[justbroke]

These powers are in place to make sure all parties to the Bankruptcy -- creditors and debtors -- follow and adhere the rules. Creditors are the worst, when it comes to compliance, but debtors lie, cheat and steal too! You really had to get on the bad side of the UST to get a dismissal with prejudice.

[djd]

Ok, I guess that answered most of my questions. If I have too much disposable income at the time of filing, but will have a lot of future expenses like health insurance, student loan payments, car repairs, ect. that will reduce my disposable income, will that be taken into consideration? I don't want to be completely penniless when I file but it seems you have to be.

[justbroke]

Ok, I guess that answered most of my questions. If I have too much disposable income at the time of filing, but will have a lot of future expenses like health insurance, student loan payments, car repairs, ect. that will reduce my disposable income, will that be taken into consideration?

Generally speaking, you can't really create true "future expenses". While your Schedule I&J, in a Chapter 13, should be forward looking, the Trustee will certainly question expenses that have not materialized. In some cases, where you know you are having an additional to the family -- due to pregnancy -- you could do a "step" plan where you factor that into the plan.

You don't have to be completely penniless. This is a combination of your specific State exemptions, how much cash you can exempt, and what types of property you are trying to protect. Sure, in Florida, we have very little in exemptions in lieu of a gratuitous unlimited homestead exemption -- meaning we can keep our $8,000,00 home. (Now you know why many professional athletes seem to all have their primary home in Florida.)

In any event, some States frown on you having cash at filing. For example, some States only allow one to exempt less than $200 in actual cash on hand and in banks! In other States, like California, very gratuitous "unused" homestead exemptions -- like California's System II -- have exemptions allowing over $20,000 in cash to be exempted. It's all about what State you live in or if you have access to the Federal Exemption scheme.

If you're in New York, you have a cash exemption (up to $2,500) but it shadows the personal property exemption (up to $5,000). I don't understand the interplay, so you'd need to consult an attorney on just how much personal property and cash you could have in NY State.

Even if you were in a State that allowed very little cash on hand, you could do things like get your car fixed, stock up on food, see the doctor, and even pay your attorney. However, having significant amounts of cash in the bank is a non-starter in just about all the States, with California being one of the special and more liberal states.

[djd]

The problem is that my wages are being garnished. I DON'T HAVE THE OPTION to simply STOP paying so that I can fix my car and then say "see, I have no money". That's why I am asking if future expenses are taken into consideration. If I CAN'T fix my car or stock up on food BECAUSE my wages are being garnished, what will happen if the trustee realizes all this extra disposable income that I will have once the wage garnishment is halted??? Sorry to seem a little frustrated but my circumstance is different! It seems like once you have a garnishment in effect the tables are turned against you.

[Snuff]

Dumb question, but why can't you include the garnishing party in the BK?

[justbroke]

Exactly. You would include the garnisher and the garnishment would stop. I don't see the issue. If you actually do have disposable income (DMI) that is over the threshold amount(s), then you are not eligible for a Chapter 13.

The garnishment means nothing in the bankruptcy context because it goes away upon filing. Neither does payments to other unsecured creditors. Those expenses can't be used to decrease your DMI so that you qualify for a Chapter 7 discharge.

I hope that makes sense.

[djd]

What schedule would the wage garnishments go on?

If the garnishment can't be used to decrease the DMI so that I qualify for chapter 7, how would I show that the DMI, after the petition is filled, will be needed for living expenses if I can't "prove it" because the wages are being garnished up to the point I file?

Do you understand what I am asking?

And as for unsecured creditors, student loan payments are not dischargeable, so why I couldn't I put them in the "future expenses" category after they come out of deferment. Does this really have to be so complex? Do I have to wait until I am destitute to file?

[free2breathe]

Basically it works this way....IF you are under median AND you have a DMI that when multiplied by 60 = less than 25% of your unsecured debts, you qualify for a Chapter 7. If you are under median, but your DMI is positive by enough that multiplying it by 60 = 25% or more of your unsecured debt, you file Chapter 13.

If you would like a little help figuring out if you have enough expenses to work the Chapter 7, you can post them here and get some feedback. Useful information is your monthly income, amount of unsecured debt, and a list of your expenses as seen on Schedule J. This will help others look to see what you may be missing as far as expenses go, or to just give you an idea of what chapter you would be facing.

It is not a simple process for sure. Bankruptcy is complex and often difficult to understand. Things that seem logical often don't have a place in the bankruptcy world. Things that seem illogical often rear their ugly heads.

And yes, one of the biggest irritants that people face is NOT being able to list their student loans anywhere that helps with the bankruptcy filing. It doesn't make a lot of sense, but there it is.

[debrouillant]

My wage garnishment is for student loans as well, but everyone on this board has very clearly told me that i cannot show the wages being garnised as a deduction of income on Schedule I, nor can i show the need to pay the student loans afterward as an expense on Schedule J. I know, this makes no sense to the two of us, because, heck, "the money is gone from my paycheck now, and it will be gone after the BK too cuz i still have to pay, so why cant i show it anywhere?" unfortunately, the idea is that student loans dont have to be paid in a Chapter 13. So, if you qualify for a 7 based on the means test, BUT you make too much money according to Schedules I and J, they will push you to a 13. And it sucks the big one that we cannot count student loans in any of it - for the purpose of Sch I and J, just pretent student loans dont exist.

As far as I know, you can plan some expenses. I have dental issues for examples, and cannot afford a dentist now, but will include dental work on my "reasonably expected" schedule J expenses.