Means test

[Mailman12]

what happens if after completing the means test you only have $100 disposable income and you owe $45k to the credit cards, is it possible to pay $25 a month for 60 months?

[justbroke]

Mailman12 the Means Test is VERY specific about what you need to pay. If you are under the median income, you "pass" the means test. If you are over the median income and your DMI is less then $124.58 (11 USC 707 adjusted) then you "pass" the Means Test for a Chapter 7.

If you DMI is over $124.58 but under $207.92 then a so-called "presumption of abuse" is in effect. You may be able to "rebut" that presumption of abuse. If your DMI times 60 is less than the LESSER OF a.) 25% of your total (non-priority) unsecured debt, or $7,025 (11 USC 707 adjusted) WHICHEVER IS GREATER, or b.) $12,475 (11 USC 707 adjusted), then you "overcome" the so-called presumption of abuse. (Note that the $207.92 I mention is $12,475 divided by 60)

In your case, 25% of $45,000 / 60 is $187.50. This would mean that your DMI would need to be less than $187.50 to overcome the presumption.

If you NEED TO FILE A CHAPTER 13 for some very specific reason -- to save property -- then you MAY be able to file a $0 Chapter 13. It really depends on your District as to whether you can get away with a $0 Chapter 13. I was in a $0 Chapter 13, but I was paying $7,400 to the Trustee for my mortgage, priority, and other secured debt (cars). (My DMI was $0.)

If this reads like hieroglyphics, then you'll need some help with the means test. I must suggest that you visit Legal Consumer https://www.legalconsumer.com/bankruptcy/means-test/ and try their means test. it will perform the calculation for you. In fact, if you're contemplating Chapter 13 AND/OR contemplating filing Pro Se, I highly suggest a consultation with several attorneys practicing bankruptcy in your area.

[Mailman12]

Thanks for the info, my attorney says that I can qualify for a chapter 7, however, I had a personal loan of $7k from a family member a few months ago, I refinanced the house because of divorce and got cash out and paid back the family member. My attorney says that the trustee will go after my family member for that money, what doesn't really seem fair is that I am already paying back the $7k to the mortgage company over the next 30 years

[justbroke]

It may not "seem" fair, but you did what many people do before filing bankruptcy. You paid back a "preferred" creditor over paying the other creditors. Your family member is an unsecured creditor and they are, in the rules of law, no different than any other unsecured creditor. When you pay one over the other a substantial amount, that's a preference. What makes the preference even more blatant, is when the creditor is an insider. An insider is a family member, business partner, or other close associate.

Personally, I would not go through a Chapter 13 because of the $7K. I would find a way to either negotiate with the Trustee to pay it, say over 12 months (if they let you do that), or I would find a way. If the relative is okay with paying the $7K to the Trustee, you can let them pay the Trustee and then you can pay them back... again. Yes, it's unfortunate, but this rule (the preference rule) was meant to level the playing field. The thing would be that, depending on your other unsecured debt and who files a claim, your relative could get a substantial portion of that $7K returned... from the Trustee if they file an unsecured claim in the bankruptcy.

Please discuss this further with your attorney.