Chapter 7 Means Test Question

[jwmc1]

Has anyone ever heard of someone getting put into a 7 if they don't pass the means test?

I have gone through the means test and my mortgage expense is substantially more than the $1,418 I am allowed. What is the rule about these expenses, I mean my payments are what they are. When I run the means test on Nolo I get a disposable income of more than $1,000, but when I use my actual mortgage payment, property taxes, and insurance, I am less than half of that

[lrprn]

Has anyone ever heard of someone getting put into a 7 if they don't pass the means test?

I'm not sure what you mean here. Are you asking if a filer shows disposable income on the Means Test and Schedules, can they still file a Ch 7? If yes, then if the filer shows less than $100/month disposable income, that's not enough to support a Ch 13 plan and the filer can file Ch 7. Anything above about $160/month is enough to support a Ch 13 plan. Between $100-160/month, it's could go either way.

I have gone through the means test and my mortgage expense is substantially more than the $1,418 I am allowed. What is the rule about these expenses, I mean my payments are what they are.

You are stuck between the mandated Means Test where you are forced to use the required IRS and census data and the mandated Schedules where you are allowed to include your real expenses.

Which wins out depends on how your local court interprets which has more weight to determine your disposable income - the amount showing on your Means Test or the amount showing on your Schedules. Only an experienced bk lawyer in your area can tell you which will be used by your trustee if you file. Most use the Means Test figures, but this does vary across the country.

[jwmc1]

I guess I am a little confused. How can I pay my mortgages if they are more than the IRS figures?

[MSbklawyer]

It's one of the many gray areas of BAPCA. Some courts are holding that your payments are what they are. Others are refusing to confirm unless mortgage expenses are made more reasonable. We're seeing the same thing when people have car payments that the court / trustee deem to be out of line.

Which judicial district are you in?

[jwmc1]

Well, not sure how I get the payment where it should be