1st circuit rules mortgage payments count towards means test even if property is surr

[hereforinfo]

even if someone stops paying their mortgage, at some point they'll be paying rent, right? rent payments aren't that much less than mortgage, are they? so what's the big difference? they are just replacing one kind of house payment with another.

I think the abuse comes in where someone is giving up an expensive home with a $6k/month mortgage and tries to use that expense to pass the means test, when they would/could be renting something more reasonable for $3k/month and have the rest in disposable income.

[justbroke]

I think the abuse comes in where someone is giving up an expensive home with a $6k/month mortgage and tries to use that expense to pass the means test, when they would/could be renting something more reasonable for $3k/month and have the rest in disposable income.

The problem is that agressive U.S. Trustee's don't see the difference between a $6K/month mortgage and a $3K/month mortgage. And, technically, they shouldn't. Their job is to ensure that the program is not abused... whether you're above median or below median income. Sure, the more affluent filers are more likely to not be able to file Chapter 7 and get more scrutiny, but I have read cases where below median filers have issues with Schedule J expenses when the Debtor is surrendering property.

[music12]

and all that becomes really unfair because at that point in time obviously the debtor hasn't yet found that apartment to rent, so the debtor has nothing with which to rebut the presumption that the standardized rent won't work for them.

[justbroke]

and all that becomes really unfair because at that point in time obviously the debtor hasn't yet found that apartment to rent, so the debtor has nothing with which to rebut the presumption that the standardized rent won't work for them.

You're starting to think like a lawyer. Very good argument. I agree that it's unfair, but reading these cases seems to point to either poorly planned bankruptcies or just an overly aggressive UST. . Either the debtor's attorney was not on his game or the pro se debtor didn't understand the "planning" aspect of Bankruptcy.

[music12]

if only you could plan to avoid an aggressive UST, that would be very effective bk planning...

[justbroke]

where do you find the chap 11 cases?

I just found one in the 9th Circuit!!!

http://www.orb.uscourts.gov/Judges/file_attachment/08-33275-rld7_190309_132820.pdf

[goingcrzy]

you just made my night!!!!!

[justbroke]

you just made my night!!!!!

You're welcome. I'm actually still doing HOURS AND HOURS of research on 11 USC 707(b)(3)(B) motions in case I convert to a Chapter 7. Ran across that case and when I got to page 19-25, I was like... wow... TeacherMom could use that. Then I remembered that you asked for a case cite as well.

Good Luck!

[fooked]

thank you so much for this information!!

[goingcrzy]

Thanks for remembering me! It was perfect timing too. We just added another medical expense to our matrix that we forgot.

Lawyer emailed me that it would be included in our bk - if we don't get dismissed.

(put a big knot in my stomach. Hopefully it was more tongue in check vs losing confidence in our case)