Means Test vs IJ

[Dontforget]

New to forum. Great advice and topics. Been doing a LOT f research and still can't find answer to my question. I did the mean test online and it shows my disposable income ar $1750. Wow! When I do th I-J I actually show in the red. How can that be? Looking at the figures I see that my 401k loans ~$1000 make a big difference. My expenses are not above the standards except for transportation as I drive 150 miles/day commuting. My question is will I be forced into th $1750 payment. I know I would be settin myself up for failure if I did. My 401k loans don't matur until. 2019, 2020, and 2021. My income ($87000) put me over median income for family of 4. Trying to figure an estimate of payment but the figures are so far off. Which one will they use or. Is that the attorneys job to negotiate that? Just confused and very anxious. Anyone have any ideas? Asks in advance.

[justbroke]

I don't know whether N.J. allows you to continue paying your 401(k) loans. In many states you can't have both a 401(k) loan payment and a 401(k) contribution at the same time. If you have a 401(k) contribution you may need to cease making that contribution until the loan(s) are paid off. Some Trustee may argue over the 401(k) loan(s) but you should be okay.

Because your transportation expense is higher than the national average, you may need to make your case on Schedule J and defend the amounts spent. You should gather your evidence that you spend "higher" than normal by being able to produce receipts if so requested.

Technically, anything that is necessary for the production of income for the health and safety of your family is an okay expense. Expenses created by the commute to/from work are necessary to produce income and feed, cloth, shelter your family. Again, some Trustee may nitpick, but it is what it is... you must earn income for family.

A good attorney will not only explain this to you, but also fight for you that you don't end up in an infeasible plan!

[Dontforget]

Thank you very much. I have an appointment this week and hope to hear that means test isn't the final determination paymene plan. Can't believe how far off the numbers are but to me it seems obvious that the IJ comparison is actual if the expenses are accurate nod necessary. Confusing to me. Thanks again for your help!

[LadyInTheRed]

While 401k loan repayments are not allowed for determining disposable income on the Chap 7 means test (form B-122A-2), they are allowed as deductions on the equivalent form for Chap 13 to determining disposable income. See Line 41 of Form B-122C-2:

Fill in all qualified retirement deductions.The monthly total of all amounts that your employer withheld from wages as contributions for qualified retirement plans, as
specified in 11 U.S.C. § 541(b)(7) plus all required repayments of loans from retirement plans, as specified in 11 U.S.C. § 362(b)(19).

The form at: http://www.uscourts.gov/file/19457/download

Your plan payment will probably be stepped up as you pay off the loans.

It is the deduction of voluntary 401k contributions that vary by state.