Help me understand this before I modify the plan please.

[olivies]

I apologize for the seemingly very basic questions, but I want to make sure I am crystal clear on this when I contact my attorney.

I am looking at my B22C which was filed.

What exactly was this form used for? Is this just a means test, for presumption of abuse and to see if you can file chapter 7 despite being over the median income? Or is this where my plan payment comes from? What exactly is the Monthly Disposable Income on line 59 used for?

I question because it lists several things that aren't cop acetic.
#1- Housing and utilities, mortgage/rent expense: Listed at standard $1049.
Our rent is 1725, and the only way I could get a $1000 rent for our family of 8 is by moving to an unsafe neighborhood- believe me, we've been looking. Shouldn't the line 26, for adjustment, been completed for the difference?

#2- Line 47 lists our vehicle. The amount listed is lower than our payment amount. Yes, it is the amount of our loan balance spread out over 5 years, however my chapter 13 plan has them paid off in less than 5 yrs, and it hasn't been crammed down yet. So they're going to be getting more than this amount I was allowed?

#3- Line 50. Is this the trustee's fee? Because it's listed at $0.

When I see this all listed out, it shows $921 a month disposable income. Sigh- I wish. Adjust it for rent alone and it goes down to $200. Then take into account the increase in taxes that come out of DH's paychecks now that we had to adjust our witholding, the 401K deduction of $190 a month, and increased education expenses because we are homeschooling 1 child now and didn't know we could include school lunch expenses in this category for our other school aged kids, and we're at a negative number.

So what do we do? Is this B22C what gets completed to modify the plan? We can't show a negative disposable income for the plan though, even though that may be accurate.

[justbroke]

Form B22C is the Means Test for a Chapter 13. Whether your District uses B22C's "disposable monthly income" (DMI) or uses a combination of Schedule I/J... I don't know. Many Trustees don't like people using line 26 and will challenge them, because it is a direct challenge to the IRS numbers. However, with a family of 8, I don't think anyone is going to complain.

In order to do your modified plan, you may or may not have to update Schedule I and J, as well as the Means Test (Form B22C). You'd also submit a new "Plan" itself. The Schedules and Means Test are just "back up" for calculating your DMI. Your "Plan" is what you're going to do.

[olivies]

Form B22C is the Means Test for a Chapter 13. Whether your District uses B22C's "disposable monthly income" (DMI) or uses a combination of Schedule I/J... I don't know. Many Trustees don't like people using line 26 and will challenge them, because it is a direct challenge to the IRS numbers. However, with a family of 8, I don't think anyone is going to complain.

In order to do your modified plan, you may or may not have to update Schedule I and J, as well as the Means Test (Form B22C). You'd also submit a new "Plan" itself. The Schedules and Means Test are just "back up" for calculating your DMI. Your "Plan" is what you're going to do.

Thanks JB. It appears that my district uses B22C from what I found from court decisions (one written by the judge who is handling our case). So I "guess" I need to get with our attorney, have her put the change in rent payment in there on line 26, adjust the $0 listed for the trustee payment, the $190 for 401K (DH hadn't been employed long enough for that to have kicked in at time of filing), and increased education expenses. However...that will put me at or below zero. Then what?

[justbroke]

Is your plan already confirmed, or are you pre-confirmation and just trying to make sure the payment is right? Please be advised, that putting things on line 26 is not necessarily acceptable in many Districts. However, as I stated before, you may have good reason with a family of that size.

[olivies]

We are confirmed

[justbroke]

A little more of a challenge when you are post-confirmation, to get things modified. I would work with my attorney to see what can be modified and deal with any backlash. Did you just discover these problems? Did you tell your attorney after you reviewd the documentation and schedules?

Just wondering how you got here.

[olivies]

We never really gave a good look over the info the attorney's office gave us to sign the day we went in. It was just a paper push: sign here, and here, initial here and here. Oh and your plan payment is going to be this amount. We informed our attorney's staff that the plan payment was not affordable to us when we signed the paperwork, and were assured the plan payment would probably go down in a few months if not all creditors made claims. (I now know that is 100% false, and not the first "mistruth" we were told). We were paying $672 a month for our vehicle payment, $1000 a month to the IRS, yet really we couldn't afford the IRS and had already retrieved the truck from the repo-man once, and couldn't pay any of the credit cards or our student loan ($253 a month). Yet their plan payment for us was $1806 (higher than the truck and IRS which we were We were awaiting a new plan payment amount, and when we realized that wasn't going to happen we began requesting they file a modification.

I would gladly move to a lower rent, we've been looking. We can't even rent in the neighborhood that is adjacent to the school my kids go to (it's a planned community) because the HOA requires credit checks to approve all tenants that the homeowners are considering and they don't allow anyone with a bankruptcy within 3 yrs or more than 10% of their credit lines with a negative mark. We were forced to move mid-lease after the house we were renting went into foreclosure, so we had to look outside of the school district and I drive my kids to their school (it's only 3 miles) instead of switching their schools yet again on them (we had moved 1300 miles from out of state in February, house went into foreclosure in July, and I did not want to make the kids go thru yet another change when they were just starting to adjust). So, I "could" pack up the family and move them 15 miles west into an unsafe neighborhood with barbed wire fences around the schools and bars on the apartment windows, but I will dismiss this case, let them have my vehicle back, pay just the IRS and deal with anything else that comes up before I'll let that happen.

With the exception of the rental issue, the other changes are "new":the 401K is new because DH wasn't eligible until August. The education expenses are new because we now homeschool one and we completely low-balled our initial $75 a month (for 4 school aged kids) because we thought we "had" to be conservative and just not do field trips or do without hotlunch and include the cold lunches in our grocery budget allowance. ( I spent $300 at the beginning of the school year on just their supplies, then SAT fees and ACT fees and PSAT fees and sports fees and 'oh, i need this for this class' fees....yeah, it just wasn't reasonable to expect we could do it on $75 a month). The "administrative expense" that was left blank I never noticed because it was just another zero on the page, but now I see that it should obviously be "something" right- I mean, the trustees always get a percentage.

I wonder, honestly, if they left things as they are so there would be a positive number. You can't be in a negative DMI going into a chapter 13 right? I have letters and emails showing that I've been questioning my case, the plan, the payment for months now going back pre-confirmation. So hopefully that will help an attempt to modify. ??Maybe. (I just want this all settled)

[justbroke]

Whether you can have a negative number for a Chapter 13 is district-specific. My District allows it, other want you to pay at least 10% to unsecured creditors. I don't know why you're in a Chapter 13. If your actualy DMI is negative, then you shouldn't be in a Chapter 13, unless you were trying to save property (a house).

I'm sorry that you signed paperwork that you didn't agree with and even informed the lawyer's office of such. It's a shame. You need a sit down with the attorney to come to some sort of agreement. I'm really serious.. if your DMI is really negative, why on earth are you in a Chapter 13? (If you say because of the IRS, note that the IRS uses the same expense guidelines, so...)

[olivies]

Our DMI is "positive" if you use the IRS's rental guideline of 1049 with no adjustment. Otherwise, we will be negative. Our attorney's office (again, have spoken to the attorney just once since we decided to file...we only ever get the paralegal calling us back so I will refer to any info/advice received as coming from her "office") told us we are above median income by about $20K, so we can not file a chapter 7 and chapter 13 really is better for us since it stops interest on the IRS debt (which ended up not being entirely accurate because the IRS secured 16K of that debt at 4% interest when they filed their claim). We have no property to save.

We actually dropped off our paperwork and paid for a chapter 7 in January of 09. In March of 09 the paralegal informed us we don't qualify for the 7 because of our income and we showed income left over after the means test (again, probably using IRS standard rent payment not our actual or obtainable rent payment) so we had to switch tracks and file as a 13, which meant we had to come up with an additional $2200 for the attorney fees because our attorney does not include fees in the plans she files. Our intent and our goal was filing a 7 from the start, but they are saying it's not possible.

I think I'm going to have to cough up the attorney's $200 hourly rate and have a sit down with her to make heads or tails of any of this. :/

[justbroke]

Ok, first, the IRS may have a percentage rate if they have an actual "secured" claim against you. If it was just general IRS tax debt that didn't have an enforcement lien, then you'd pay it back at 0% interest over the term of the plan. The IRS secured debt attaches to all your personal property.

We actually dropped off our paperwork and paid for a chapter 7 in January of 09. In March of 09 the paralegal informed us we don't qualify for the 7 because of our income and we showed income left over after the means test (again, probably using IRS standard rent payment not our actual or obtainable rent payment) so we had to switch tracks and file as a 13

So, it's the $700 or so difference in rent payments. That seems right. However, I just want to say that being over the median income does not prevent someone from filing and receiving a discharge in a Chapter 7. While it does make it more difficult to receive a Chapter 7 discharge, the real way to receive a Chapter 7 discharge is to have your expenses exceed your income.

I think I'm going to have to cough up the attorney's $200 hourly rate and have a sit down with her to make heads or tails of any of this. :/

I wouldn't pay them. A conscientious attorney will always make sure their client understands what they are signing and getting into. It sounds like either the attorney didn't counsel you well, or you weren't listening. I can't judge that, nor will I. I will say that the two of you definitely weren't communicating.

You're in a Chapter 13, because your attorney would not use the $1,700 figure for the rental, basically. You are also in a plan that you can't afford, so you really really need to get this taken care of.