Need some major help from people who have done a 13 / means test Q's

[SBS718]

Thank you all for taking the time - just broke and lady in the red I need HELP!!!
my previous post stated that I had a presumption of abuse and basically the UST came back with a number of $1600 for my DMI. My spouse is not filing with me.
To say I was shocked was an understatement - so here we are met with attorney today and I was pissed . The paralegal took a full car exemption for my spouses car and he doesn't have a car payment - also took my 401k loan off the means test as well which we all know is a no no ... there were definite miscalculations - taking extra $ for hoa payments , etc
After meeting with attorney today we have adjusted the numbers and its down to $670 per month - this also includes my spouse purchasing a car as he has a old vehicle with 175K miles on it . This is still very high for us with a high mortgage , kids in daycare and now 2 car payments . My spouse is only paid 22 times per year so this includes socking away $$ for that
When I asked about getting the payment down - my attorney stated since I was above the median that the schedules would not determine my payment only the means test will ?. This doesn't make sense to me after my mad dash on chapter 13 research this week
I see many folks on here talking about making sure we have a good budget with all of the line items etc and he said it didn't matter that we had to use the means test and their standards ... Can someone enlighten me on this ?
DO i need a new attorney? I have already paid him $2350 and the rest of the payment can go through the 13 - he states he does about lots of chapter 13s ( he only does BK ) and he will be having me work with a new paralegal who is their 13 expert .He has excellent ratings but I am just at a loss right now - When I asked why we even tried a 7 he said - " we took a shot and we haven't lost anything for trying" - this bothers me .. has anyone ever switched attorneys within a case like this ?
I have 2 kids and I just wanted to be able to have a line item for their expenses like 1 sport or activity per year and I want to succeed with this 13 and I am really feeling desperate . Thank you all

[justbroke]

my previous post stated that I had a presumption of abuse and basically the UST came back with a number of $1600 for my DMI. My spouse is not filing with me.

Even though spouse doesn't file with you, your spouses income does count against you on the Means Test. With this high of a DMI, you are a Chapter 13.

The paralegal took a full car exemption for my spouses car and he doesn't have a car payment - also took my 401k loan off the means test as well which we all know is a no no ... there were definite miscalculations - taking extra $ for hoa payments , etc

I don't know what you mean by "took" a full car exemption for a car. Even if you don't have a car payment you have the right to the operating allowance. Whether you can take the "ownership" allowance depends on district. Again, I don't know what "taking extra $" means.

After meeting with attorney today we have adjusted the numbers and its down to $670 per month - this also includes my spouse purchasing a car as he has a old vehicle with 175K miles on it . This is still very high for us with a high mortgage , kids in daycare and now 2 car payments . My spouse is only paid 22 times per year so this includes socking away $$ for that

Socking way $$$ for what? General savings or so that your spouse can purchase a car?

When I asked about getting the payment down - my attorney stated since I was above the median that the schedules would not determine my payment only the means test will ?. This doesn't make sense to me after my mad dash on chapter 13 research this week

Chapter 13s are more complex than many people believe they are. In some Districts they only go by the Means Test unless there is a major discrepancy between that number and Schedule I and J. In at least one District in Florida, it's the Means Test DMI that is used. Schedule I and J are only looked at if the DMI is higher or significantly different to justify a deeper look. As one appellate court wrote, the Means Test determines the DMI and that number is the "starting point" of the inquiry. By starting point, many courts take that to mean the "minimum".

I see many folks on here talking about making sure we have a good budget with all of the line items etc and he said it didn't matter that we had to use the means test and their standards ... Can someone enlighten me on this ?
DO i need a new attorney?

My District uses the Means Test as well. Many courts only use the Means Test unless you can show that the projected DMI is going to be different (something is changing) and the lookback isn't appropriate. It's just that simple. Do you need a new attorney? I don't know but it appears that you are not comfortable with this particular attorney because you are not receptive to the answers.

I have already paid him $2350 and the rest of the payment can go through the 13 - he states he does about lots of chapter 13s ( he only does BK ) and he will be having me work with a new paralegal who is their 13 expert .He has excellent ratings but I am just at a loss right now - When I asked why we even tried a 7 he said - " we took a shot and we haven't lost anything for trying" - this bothers me .. has anyone ever switched attorneys within a case like this ?

I don't know if people have switched under the same circumstances, but you have a significant DMI (even at $600/month) which will not get you a Chapter 7 discharge.

I have 2 kids and I just wanted to be able to have a line item for their expenses like 1 sport or activity per year and I want to succeed with this 13 and I am really feeling desperate . Thank you all

These are included in the Means Test in "bulk" item categories such as the "Food Clothing & Other Items" expense category. There are also expense items for recreation, newspapers, etc. The recreation category may be scrutinized if it's extreme (don't ask me what a Trustee will find extreme), but it is there. There is also a category for child care.

A Chapter 13 may not be good for a family that has several paid activities for their children. The bankruptcy code, while it may seam harsh, will not pit extracurricular activities against paying your disposable income (DMI) to your unsecured creditors. Most who speak about having a good budget, are worried about having food on the table and being able to save a little, not-so-much worried about activities. I had to find creative ways for the children to have fun and I can tell you it was a better time under that pressure (I created concepts like movie night, make your own pizza night, bike trail outings, beach outings, "park day", etc).

Just curious, did you file on your own in the Chapter 7 and then obtained an attorney for the conversion to Chapter 13? It's really just a curiosity since you had a $1,600 DMI in the Chapter 7. Also please realize that the Chapter 13 Trustee will know why you converted and will likely scrutinize your expenses as well.

[Chrysalis]

When I asked about getting the payment down - my attorney stated since I was above the median that the schedules would not determine my payment only the means test will ?. This doesn't make sense to me after my mad dash on chapter 13 research this week
I see many folks on here talking about making sure we have a good budget with all of the line items etc and he said it didn't matter that we had to use the means test and their standards ... Can someone enlighten me on this ?

I have 2 kids and I just wanted to be able to have a line item for their expenses like 1 sport or activity per year

My understanding is this -- and someone correct me if I'm wrong.

If you are above the median for your state, you do not get to use your own actual figures for things like groceries, activities, etc. They want you to give them every dime THEY decide you can afford. So the numbers that automatically fill in on the means test, like the one on legalconsumer.com -- those are the numbers they go by.

I believe I asked you before if you had ever completed that online means test -- have you now? If you go there and work through the steps, you will see what "counts" and what doesn't.

Now, I do believe they have to take your 401k loan payment into account when they are calculating a Chapter 13 payment. Clearly that is not DMI because it is required to be repaid. I'm sure your attorney knows this, and has already done this.

This doesn't mean that your children can't have their activities. It does mean that you will have to make sacrifices in other areas. Have you and your husband sat down and made a realistic budget ... figured up how much you have spent in the past year or so, in each category? Decided what is going to have to change? If you feel you have a realistic and do-able budget assembled, including that $670 per month Chapter 13 payment, then the next step to allow for the kids' activities is to decide where you can further tighten to make that happen.

If you have no realistic budget including this Chapter 13 payment, it may be time to reassess the entire situation. I know you've said you are filing alone so that your husband can keep paying on this one credit card because it's a company he believes in (or something to that effect) -- but how much is that payment per month? What else is he continuing to pay on, that could possibly be included in a bankruptcy -- is there anything else?

I may be wrong, and feel free to correct me if so ~ but my gut tells me that maybe you jumped into things without doing quite enough research on this topic. This is understandable when life is busy and stress and emotions are running high. But. It's not too late to back out and re-assess, and it's not too late for your husband to file with you. The truth of the matter is that if you don't have a realistic budget for how you are going to survive through five years of a Chapter 13 -- it is going to fail.

[newlife13]

We also could not just use my Schedule J expenses because the payment was coming out lower than the DMI. (sigh). My attorney worked really hard at finding ways to get my DMI down and eventually it was something like negative fifty cents. Unfortunately, I do not qualify for a Chap 7 because while I have 2 children living with me, my ex-husband claims my daughter and I claim my son, so *technically* I have only one dependent. (double sigh)

I am not saying to change attorneys, but you really have to understand the process. Having a patient attorney to explain things to do you and find use every single exemption and tool at his/her disposal is critical.

Also, I think a lot of people regret not having their spouse file with them. I would ask your attorney a lot of questions about that before filing. Good luck.

[SBS718]

Thank you all for your feedback and I apologize if my terms are not correct - still getting used to all of this ! i have filed with a lawyer from day 1 and i trusted his paralegal to complete all the information correctly ... my fault
As far as filing jointly - they do not recommend it at all as
1- our mortgage is UTD and my spouse will then be allowed no marital adjustments hence the payment will be much higher
2. I was in panic mode tuesday and as i write this i realize what everyone on this board has said - have a plan and stick to it - chrysallis - yes we have a line by line budget and we will continue to go over it with a fine tooth comb and make necessary adjustments - I also have opportunities to work overtime / PRN and I am hoping once confirmed this will be OK and not bring on too much issue
3. one of the UST issues was my spouses paycheck deductions including a flex spending account for daycare expenses - this amounts to 450/month -it was included only on his adjustment but now we added it back on line 21 properly as this is a legitimate expense - ( we were not doubling it )its basically a wash
4. we will be getting my spouse a car which was not factored in - hopefully in the $300 range and reliable enough to get us through 5 years
5. so i am hopeful we can get the payment to 600-700ish and i have factored that in to the budget and its manageable


Other questions I have -
1.may I keep contributing 3% to my 401k in a 13 ?
2.is there such a thing as too much marital adjustment ? My spouse is paid on 22 pays per year so we budget for the other 4 - this savings so to speak is included in his adjustment - so he has a small student loan , this paycheck savings , 1 credit card , 1 personal loan and now his vehicle -does this seem too extravagant . I worry about being scrutinized even more due to filing a 7 and it not going through but all i can do is keep on top of all the figures and my lawyer and see what happens!
3. Now that i am converting how long until i have another meeting to get confirmed ?

My attorney states he spoke to the UST lady and she was very nice and " not out to get anyone " just trying to be fair - i pray this is the case he will file a motion to convert after the 20th of march as he wants to input my info in to their new software and go over it again

the last 2 things i hope to find room for is we need a new HVAC system in the house about 4-5 k and my son needs braces at 3k . I hope to be able to go through our medical with a fine tooth comb and make sure it has enough to accomplish his braces and ADHD needs .

I cant thank you all enough for the question answering and advice/ support - i look forward to getting started on the road to discharge ... my gosh 5 years seems like forever! Maybe i will luck out and have some creditors not file a proof of claim a girl can hope right ?!

[justbroke]

1.may I keep contributing 3% to my 401k in a 13 ?

Most Districts will allow either a loan or an ongoing contribution. If you have no outstanding 401(k) loans, then you should be fine. Your attorney should include this in your Means Test.

2.is there such a thing as too much marital adjustment ? My spouse is paid on 22 pays per year so we budget for the other 4 - this savings so to speak is included in his adjustment - so he has a small student loan , this paycheck savings , 1 credit card , 1 personal loan and now his vehicle -does this seem too extravagant . I worry about being scrutinized even more due to filing a 7 and it not going through but all i can do is keep on top of all the figures and my lawyer and see what happens!

No. There is no such thing as too much marital adjustment so long as it is defensible. He technically can't add his "savings" to the adjustment, but things like loans, 401(k) deductions, credit card payments, personal loan payments, and vehicle payments are all okay. They are going to scrutinize anyhow especially with a non-filing spouse with significant income.

3. Now that i am converting how long until i have another meeting to get confirmed ?

You will usually have your new 341 Meeting with 30 days of conversion (sometimes up to 45 days of conversion). Your confirmation can take 4-12 months. In Florida, the minimum time from filing to confirmation is 5 months. My confirmation took 7 months. A lot is just procedural and no reflection, necessarily, on you or the case. A Chapter 13 bankruptcy is very slow moving. Many Districts take their time to wait for all claims to come in (they have 90-180 days following 341 Meeting) and then another 30 days for you to file any objections to the claims. The 180 days is for governmental units (IRS, State, etc). Some districts will do an early confirmation almost immediately, but most will wait 120 days before "confirming" the plan. They will hold an initial confirmation hearing based on the law within 20-45 days after the 341 meeting.

See how complex that got? It's something you really don't need to worry about. What you worry about is staying on plan, making your payments on time, and enjoying your life. If everything is working smoothly, you'll only hear from the Trustee once a year and that's either for tax returns or to send an annual statement (of payments).

Your goal is to stay off the Trustee's radar and just do your thing.

My attorney states he spoke to the UST lady and she was very nice and " not out to get anyone " just trying to be fair - i pray this is the case he will file a motion to convert after the 20th of march as he wants to input my info in to their new software and go over it again

The UST and all of them are "nice" people, they just need to follow the law. While the law may be harsh I have seen and sat in on hearings with some incredibly lenient and super nice judges and Trustees, despite what some people experience. (Now, I'm speaking about Chapter 13 Trustees and the UST. Some Chapter 7 Panel Trustees can be difficult, to say the least.)

the last 2 things i hope to find room for is we need a new HVAC system in the house about 4-5 k and my son needs braces at 3k . I hope to be able to go through our medical with a fine tooth comb and make sure it has enough to accomplish his braces and ADHD needs .

Do you put money into an HSA for things like braces, or does your medical completely cover that? Have you told your attorney these things? I may have done the HVAC before filing... as it would likely be secured debt and would be factored into the Chapter 13 (reducing your DMI by redirecting the payments from unsecured to the secured debt).

I cant thank you all enough for the question answering and advice/ support - i look forward to getting started on the road to discharge ... my gosh 5 years seems like forever! Maybe i will luck out and have some creditors not file a proof of claim a girl can hope right ?!

Unless you're in a 100% plan, which it doesn't appear to be, having some creditor not file a proof of claim won't be so much of a boon for you. If none of them filed... then that would be awesome. So here's to hoping none, or very very few tiny valued claims, are filed.