Mean Test Nolo question

[firefly]

Okay, we did the Nolo test and our monthly disposable income came back in the negative. So can we still file a 13? And if so, how could we make payments?

This stuff is confusing! Thanks for any help. We just gave our attorney the paperwork yesterday, so this is all new to me.

[optimistic1]

Yes you can still file a 13, but it depends on a variety of factors.

Your disposable income will be determined from subtracting your allowable (reasonable) monthly expenses from your average monthly income.

If what remains is enough to pay your particular debts, then the trustee and court would allow you to proceed.

Use these two links to help you determine what your disposable income is.

INCOME

http://www.creditsoup.com/resources/calculators/monthlyincome.asp

EXPENSES

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

Hopefully your number is positive.

[firefly]

I took all the tests. After the deductions that are allowed we don't have anything left to pay. We have a family of six, so thats quite a big deduction and our real expenses are under what is allowed. So I'm confused. Can we still do a Chapter 13?

Just sent the paperwork to the attorney this past week and haven't heard back yet they said probably would take two weeks to get it in order to file.

The only reason we are going for the 13 is to strip our 2nd and 3rd mortgage, which would save us $32,000.

I'm wondering if we may have to go the Chapter 7 route.

[Tbornetun]

Depending on what your unsecured debt may be, you would probably be better off going chapter 7 and then work to pay off the 2nd and 3rd mortgages over the next 5 years. It would be better than a 13 plan.

[firefly]

That's what I'm wondering too, maybe Chapter 7 would be better. Although, we are behind in our house payments. Don't you have to be caught up in those to file 7?

I really like the idea of a lien strip, that was the only reason we were considering a 13.

[Tbornetun]

Yes, you would need to be current on your mortgage payments if you intend to keep the house. But, if you don't have enough dmi to pay the arrearage in a Ch 13, you can't go that route either.

[firefly]

Oh boy. That's not good at all. So if we want to keep the house, and file a 7, we need to come up with the back payments from somewhere. Luckily we are only 2 payments behind, but still that's a lot when we have to come up with the money to file too!

My husband was on four days all summer, I'm wondering, since he's back to five, if they average out the last six months earnings, or if we could use his five days now. That may make a difference for us and let us file the 13.

[firefly]

Okay another question. I have a 22 year old living at home that we are including in our number of people. If I take her out, it gives us disposable income left of $163.00 a month.

So maybe that would be our solution. Let her file her own taxes. She really doesn't cost us anything anyway. She pays her own bills, just lives here.

[Tbornetun]

How much does your unsecured debt total?

[firefly]

About $45,000 unsecured.

[Tbornetun]

I would file chapter 7, get caught up on my first mortgage and then work at paying off the 2nd and 3rd within the next 5 years or so.