Clarification needed-The "magical" 187 a month vs 25% of unsecured debt

[daylate]

I think I know this but just to make sure I'd like to have some experienced folks chime in:

On various threads I've read that if your DMI based on I&J is greater than 187 you can be converted to a 13.( I've also read that you could be converted at less than 187)

I've also read that if your DMI times 60 is not equal to at least 25% of your unsecured debt you are ok

So in a hypothetical case say you have 100k of unsecured so 25% is 25k

Your DMI is +400

400X60=24,000 which is less than 25k

So no conversion to 13?

In example 2

lets say your unsecured dept is 20,000- 25% IS 5K

Your DMI is +100

100x60 =6000- so converted?

Thanks.

[daylate]

Bueller? Anyone?

[gmk]

The means test gives you a few chances to pass. 1- If you are under the median income for your state and family size you pass 2.- If over the median, next you do some math with your income vs expenses and secured/priority debt to arrive at monthly disposable income. If the result of this is under $109 you pass, if over $182 you don't. 3-If between those numbers you do the unsecured debt part where 25% of your unsecured debt is compared to the prior calculation you made multiplied by 60. If 25% of your unsecured debt is more than your monthly disposable income you pass.

When I say pass I mean “The presumption does not arise."

I was well over the median and I could have filed a couple of months earlier by going all the way to step three but I elected to wait for the income calculation to drop off a little and pass via step two. Even so the UST filed a presumption of abuse and then on further examination took it back a few days later.

In your example, a DMI of $400 is a no go (as per step 2 above) regardless of the 25% calculation. You only get to do the 25% calculation part if you are under $182.5 ($10,950/60).

And as usual, go over this with your attorney. He may have a way to make the numbers work out better for you. Don't forget that the means test is just a hurdle, the real deal is in your income/expense schedules.

[debee]

The DMI figures changed last April. The new range is $117-$195.42 give or take a few coins. Most websites are not publishing the correct figures.

As gmk explained, if you have less than $195.42 but more than $117, the only way you can rebut the presumption and proceed with a chapter 7 is if your DMIx60 is less than 25% of your nonpriority unsecured debt.

If your DMI is $195.42, you have no rebuttal and your case will be dismissed/recommended for conversion to a 13 no matter what.

[HHM]

Essentially there are 3 parts to the means test.

Part 1. Over/under. If under median you pass, if over median, go to part 2.

Part 2. Disposable monthly income: do you actually have money left over at the end of the month to pay something to your creditors. If yes, chap 13 or dismiss. If the DMI is under a certain amount, go to part 3.

Part 3. The "not enough DMI to matter" test. As debee pointed out, if your DMI is LESS than a certain amount ($195, or whatever the current figure is) and you take that number, multiply by 60...if the result would pay back less than 25% of your unsecured debt, then stay in chap 7. If not, chap 13 or dismiss.

Part 3 is rarely, if ever, invoked. If you are that close on DMI in part 2, there is usually a way to bump an expense or take a special circumstance that shows no DMI, thus, allowing you to pass Part 2.

[daylate]

Thanks for the reply it helps clear things up.