Couple of newbie questions

[Tryingtokeep]

Did the means test and was slightly over the median income by about 800 but my question is on the bottom line result in the test. It said my payment was 315 that will go to the trustee. Does that mean I would pay my mortgage and car loan and household expenses (utilities etc...) outside of the plan then pay the trustee 315 each month. I seems crazy but if that's it I would be fine with that. I think I would actually be able to save a few hundred dollars each month. I guess we just don't spend as much on certain expenses as the numbers that are used.

I am also trying to get my mortgage modified since I qualify under that HASP plan but would I be better off waiting to file until I see if I get the modification or go ahead and file and keep trying for the modification.

What happens when my car is paid off in 2 years. Does the extra money each month go to the trustee or do I keep it?

This forum is great for newbies like me!!!

Thanks,

RD

[lrprn]

Did the means test and was slightly over the median income by about 800....

$800 over isn't much at all. Are you sure you included ALL your legitimate expenses? Take a look at this expenses calculator to see if you missed anything - http://www.goainc.com/fraley/calcula...alculator.html . Also did you include once-a-year expenses like property taxes or HOA fees?

It said my payment was 315 that will go to the trustee. Does that mean I would pay my mortgage and car loan and household expenses (utilities etc...) outside of the plan then pay the trustee 315 each month.

You will make your mortgage payments, pay your utilities, and any other bills that you are responsible for paying after filing a 13. Exactly what those bills will be are determined by how your Ch 13 plan comes together.

I think I would actually be able to save a few hundred dollars each month. I guess we just don't spend as much on certain expenses as the numbers that are used.

Be careful here. Just because your version of the Means Test came out the way it did doesn't mean that when an experienced Ch 13 lawyer completes your Means Test and Schedules that it's going to come out exactly like yours did. Could show less or no disposable income - that's the good part - so you may be able to file Ch 7 instead. However, you could come out showing more disposable income - the bad part.

You can't count on anything you put together yourself because there's so much variation around Ch 13 practices and customs around the country. Welcome to different case law interpretations and different customs and practices in different local courts and bk districts around a very poorly rewritten current bk law.

Ch 13 is not a pro-se (file without a lawyer) project. If you haven't done so already, set up free initial consultations with at least 3-4 different experienced bk attorneys in your area. Finding the right bk lawyer to file your 13 is the most important thing you will do. Creating a solid Ch 13 plan that is liveable for 3-5 years is an art, not a science. Having the right lawyer will literally make the difference between having a decent life during your 13 or being in a living financial hell barely scraping by the entire time. Do this right the first time - interview, interview, and interview some more.

I am also trying to get my mortgage modified since I qualify under that HASP plan but would I be better off waiting to file until I see if I get the modification or go ahead and file and keep trying for the modification.

If you have the time, then it's better to wait until you get your modification before filing. However, realize that unless your mortgage is with Fannie Mae, the other lenders are not jumping in to modify. Almost all of them are declining modifications or dragging their feet for months and months without making a decision.

It's my understanding that after you file Ch 13, you cannot modify your mortgage without your trustee's cooperation. I'm sure one of our more knowledgeable members or mods will come along and correct me if I'm wrong.

What happens when my car is paid off in 2 years. Does the extra money each month go to the trustee or do I keep it?

You get to keep the car, but the extra money from your monthly payment just increases the amount your other creditors get.

You keep paying the agreed payment amount through the life of your plan until (1) you've paid the agreed number of payments; (2) you've paid your creditors back 100% in your plan; or (3) your plan payment is modified due to long-term decreases in income and/or long-term increases in expenses.

[Tryingtokeep]

thanks, I will not try to do this without an attorney if this is what we decide to do. I will certainly interview a bunch of attorneys since it seems the initial visit is a free one with most attorneys.

My loan is a Freddie Mac loan and I do qualify for the HASP plan since my payment is now more than 31% of my income. I am going to try to get this done first. I may also try to just settle with CC debt since I do expect to come into around 10k in about a month and that would be a good starting point to settle about 35K in CC debt. If this would work I could avoid filing altogether.

As for the car, does the trustee monitor stuff like that and would know when the payments are up. Maybe I would be better off to refinance the car loan and extend the term and lower the payments although I suppose that's just a wash since the extra funds saved would go to the trustee anyway.

[DustinLH00]

I don't want to sound mean at all or anything, but this is the same advice that was confusing me as a new member. I think what people get mixed up with on here is Sched I minus Sched J result vs. the means test.

If you are over the median income, you MUST take and PASS the means test in order to file a Chapter 7. And as far as I understand, the means test does not allow for personal expenses and does not allow any wiggle room. It is your gross pay minus the IRS standards for everything and whatever debt you are keeping after BK.

It is my understanding that if you fail the means test, you cannot file a 7. So there really is no way around it except lowering your income or aquiring more secured debt that you will keep after BK.

Please correct me if I am wrong, but I was getting frustrated when I stated that I was over the median and failed the means test and people kept talking about my actual expenses, when these actual expenses dont work on the means test...

$800 over isn't much at all. Are you sure you included ALL your legitimate expenses? Take a look at this expenses calculator to see if you missed anything - http://www.goainc.com/fraley/calcula...alculator.html . Also did you include once-a-year expenses like property taxes or HOA fees?

You will make your mortgage payments, pay your utilities, and any other bills that you are responsible for paying after filing a 13. Exactly what those bills will be are determined by how your Ch 13 plan comes together.

Be careful here. Just because your version of the Means Test came out the way it did doesn't mean that when an experienced Ch 13 lawyer completes your Means Test and Schedules that it's going to come out exactly like yours did. Could show less or no disposable income - that's the good part - so you may be able to file Ch 7 instead. However, you could come out showing more disposable income - the bad part.

You can't count on anything you put together yourself because there's so much variation around Ch 13 practices and customs around the country. Welcome to different case law interpretations and different customs and practices in different local courts and bk districts around a very poorly rewritten current bk law.

Ch 13 is not a pro-se (file without a lawyer) project. If you haven't done so already, set up free initial consultations with at least 3-4 different experienced bk attorneys in your area. Finding the right bk lawyer to file your 13 is the most important thing you will do. Creating a solid Ch 13 plan that is liveable for 3-5 years is an art, not a science. Having the right lawyer will literally make the difference between having a decent life during your 13 or being in a living financial hell barely scraping by the entire time. Do this right the first time - interview, interview, and interview some more.

If you have the time, then it's better to wait until you get your modification before filing. However, realize that unless your mortgage is with Fannie Mae, the other lenders are not jumping in to modify. Almost all of them are declining modifications or dragging their feet for months and months without making a decision.

It's my understanding that after you file Ch 13, you cannot modify your mortgage without your trustee's cooperation. I'm sure one of our more knowledgeable members or mods will come along and correct me if I'm wrong.

You get to keep the car, but the extra money from your monthly payment just increases the amount your other creditors get.

You keep paying the agreed payment amount through the life of your plan until (1) you've paid the agreed number of payments; (2) you've paid your creditors back 100% in your plan; or (3) your plan payment is modified due to long-term decreases in income and/or long-term increases in expenses.

[Tryingtokeep]

I fail the means test where it has my disposable income at 315 per month which comes out to a payout of 18,900 over the 5yrs. The means test on consumer law says anything over 10,950 over the 5yrs and you fail and must file chapter 13.

[DustinLH00]

I am in a very similar boat myself. I am $900 over the median and the means test shows my disposable income to be $219 a month. Which is a fail. I know that with my actual expenses I will definitely have a negative disposable income on the Schedule J when I end up filing, but because I fail the means test, I cannot go that far. Hopefully in October, when they raise the median income figures, they will raise it by more than $900. Then I will have a green light, as will you if you can wait that long...

I fail the means test where it has my disposable income at 315 per month which comes out to a payout of 18,900 over the 5yrs. The means test on consumer law says anything over 10,950 over the 5yrs and you fail and must file chapter 13.

[woeisme]

If you fail the means test (over the median income) that just means there is the "presumption" of abuse in filing CH 7, doesn't mean that CH 7 is impossible. You will just have to prove why in your case, it is not an abuse of the system. those very close to the line have an easier time with this than those way over the median, but it can even be done tens of thousands over the median, if there is enough justifiable expenses that show you have no disposable income to fund a CH 13 plan. Hope this helps.

[liz417]

Woeisme is correct, you can still be over the median and file a ch 7...it's all about your expenses. I am over the median by 20k and was still able to file a ch 7. I must also include that I had to consult with 6 different attorneys before I found someone willing to look at my numbers, most attorneys saw our income and wanted to put us in a ch 13....

[DustinLH00]

I went to 2 lawyers and both wouldn't look at my numbers for expenses and lied to me about the means test and on top of that neither wanted to talk to me about a 13? WTF

Woeisme is correct, you can still be over the median and file a ch 7...it's all about your expenses. I am over the median by 20k and was still able to file a ch 7. I must also include that I had to consult with 6 different attorneys before I found someone willing to look at my numbers, most attorneys saw our income and wanted to put us in a ch 13....

[liz417]

I went to 2 lawyers and both wouldn't look at my numbers for expenses and lied to me about the means test and on top of that neither wanted to talk to me about a 13? WTF

Like I said, keep searching. I know it's time consuming to have to tell the same "story" over and over, but I made a list of quesitons regarding my concerns, set up 2 consults back to back on my days off and left my checkbook at home and met with them Most consults only last 20-30 minutes and I knew within the 1st 5 minutes if I was was going to retain them or not. I left my checkbook at home because I didn't want to be pressured into retaining someone on the spot.

Good Luck!

P.S. Why didn't they want to talk to you about a ch 13?

[DustinLH00]

P.S. Why didn't they want to talk to you about a ch 13?

I have no idea! And I was the one asking for details and they still both said I dont want to do a 13 since I am so close. Just get my income lower.