Laughing to keep from crying!

[lolly78]

My attorney e-mailed me to tell me how he calculated my payment:

DMI (1785 x 60 + 2000.00 balance atty fees + 6072.00 past due IRS ) x 1.055 ( trustee's percentage ) = $2025.

Why would he add anything to my DMI? I would think that they would pay attorney, trustee and IRS out the $1785, then pay unsecureds what ever is left over.

[lolly78]

From the means test (were a family of 3):

Income: 10827
Food/apparel etc. 1152
Healthcare allowance 180
Utilities 548
Vehicle operating expenses 502
Public transportation 182
vehicle expense 43.18 (496-452.82)
taxes 2284.24
involuntary deductions 75 (union dues)
life ins 35.40
childcare 463
telecom 150
health insurance 83.42
priority claims 101.20 (irs debt/60)
admin expenses 141.75
qualified retirement deduction 560.08
Monthly disposable income 1784.93

Schedule J

Mortgage 2088
Utilities 275
Other 264 includes:
cell 150
internet 38
cable/satellite 65
HOA 11

home maintenance 50
Food 600
clothing 100
laundry/dry cleaning 50
medical/dental 50
transportation 508
recreation 50
life ins 60
auto ins 220
auto 599
daycare 463

net income 7006
expenses 5834
net income 1569.44

[shark66]

My attorney e-mailed me to tell me how he calculated my payment:

DMI (1785 x 60 + 2000.00 balance atty fees + 6072.00 past due IRS ) x 1.055 ( trustee's percentage ) = $2025.

Why would he add anything to my DMI? I would think that they would pay attorney, trustee and IRS out the $1785, then pay unsecureds what ever is left over.

Correct train of thoughts on your part...

Nothing's there to be added, not to your DMI for crying out loud. He/she should be trying to minimize it...

I have never heard of a stripped second mortgage getting paid in full in any Ch. 13 proceeding...and I read quite a few while I was preparing my own...there's something VERY wrong with this whole picture and I'd be interviewing another attorney or two or seven ASAP...

My $0.02 only...

Good luck.

[momofthree]

#1, your net income you have listed at the bottom doesn't match your net income from your means test. It's off by about $700/mo unless I'm missing something....And you're having a LOT of taxes taken out each month, do you normally break even, owe, or get a refund at this withholding rate?

#2, your expenses listed only add up to $5377, not the $5834 you have listed, so I'm not sure if maybe a line item or two were left off accidentally.

Your schedule J seems really tight. You're not even maxing out your IRS allowances on it. My suggestions listed below (but even this doesn't get you up to the $5834 that you stated as your expenses). Does the transportation expense you listed include tags, tires, maintenance, etc?

Schedule J

Mortgage 2088
Utilities 275
Other 264 includes:
cell 150
internet 38
cable/satellite 65
HOA 11

home maintenance 100
Food 625
clothing 150
laundry/dry cleaning 50
personal care/household supplies: 50
medical/dental 180
transportation 508
recreation 50
life ins 60
auto ins 220
auto 599
daycare 463

[momofthree]

My attorney e-mailed me to tell me how he calculated my payment:

DMI (1785 x 60 + 2000.00 balance atty fees + 6072.00 past due IRS ) x 1.055 ( trustee's percentage ) = $2025.

Why would he add anything to my DMI? I would think that they would pay attorney, trustee and IRS out the $1785, then pay unsecureds what ever is left over.

On the means test you posted, he included your IRS debt and trustee fees as expenses that were subtracted out of your DMI, so adding them back in would be correct. However, the schedule J is a more accurate reflection of your DMI and I would push for them to use that figure if it provides a smaller dmi. However, with your high income with only a household of 3, it looks like you'll be in a high payback plan regardless.

Have you already attempted a settlement with your 2nd mortgage?

[lolly78]

Hi momofthree,

We originally were not having enough taxes taken out so we ended up owing two years and had to get on a payment plan with the IRS. We changed our withholding, mine is married/0 and my husband is single/2. He used to get alot of overtime so we wanted to make sure we were paying enough, plus they told us any refund would be applied to what we owed, so I figured we'd pay them off faster by having more taxes taken out. We haven't finished our taxes yet, but the refund is about $2000 this year.

I just realized that the attorney didn't put my husbands correct income on the schedule j, so this will need to be done over. I didn't even think about car stickers and such, I think I will pull my own schedule I/j from online to calculate my own numbers!

So you can choose which one to use? He made it seem like we had to use the means test.

[lrprn]

So you can choose which one to use? He made it seem like we had to use the means test.

There have been conflicting case decisions across the country about whether the disposable income on your Means Test or the disposable income on your Schedules is used when calculating your Ch 13 payment. You'll have to ask your lawyer which one normally 'trumps' in your local court.

[Pandora]

Just wanted to add to the list above:

Health/Medical: dont forget to add in any deductibles you may be required to pay in through your health insurance plan (in-network/out-of-network/medications). Does this include all OTC and RX medications as well as co-pays for drs. visits / specialists?

- Grocery: I think your grocery is very small for a family of 3. I can tell you that we are at $500 a month and while most times we can stay within it, there are times when it exceeds it depending on what we stock up on - and we use coupons galore! Make sure you allow enough room for extras.

- pets: got any? Work in vet care on top of food - you dont want any surprises coming up. We allocated $40 a month for our cat and....last month he got terribly sick (as in death-bed) - $2K later... and I'm still making payments to my vet. So definitely ensure you budget if you have pets.

insurance: if you're in a credit profiling state - be prepared for your home & auto insurance to jump. Ours jumped by $300 each once we filed BK. (grumbles....stupid stupid stupid law)

Auto maintenance: is your number above for gas, oil changes, tire rotations, stickers, inspections, etc etc etc? How many vehicles do you have?

Personal Property Taxes: do you have these where you are? Did you allocate for them?

School: Supplies, field trips, fund raisers, lunches, after school activities?

Utilities: $254 seems awfully low for heat/air/electric/gas (whatever you have). Are you on a budget monthly - if so, then it usually reviews once a year and can increase. If not on a monthly budget cycle - I'd recommend trying to do so so that you dont have any surprises when you get a high month. Also remember to include any amounts that you may have to pay at the end of your budget billing cycle.

Recreation: I think is a tad low; we were allowed $60 (again, family of 3). Sometimes we dont use it, sometimes we do - while this should include saving for "vacation" - also think of any movie rentals, fast food night out, pizza, etc - all of that goes into Recreation.

Christmas / birthdays: Some trustee's allow this, others dont. Ours does - so we were allowed $50 a month.

Tithing: Do you tithe? Give to organizations?

I'm sure I'll think of more, but these are things I noticed

[Pandora]

thought of a few more - they may fall into other categories above, however make sure you account for them if they apply:

AAA (if you have it)

Real estate taxes: are they paid inside your mortgage / escrow?

Owing taxes: do you usually have to pay the IRS? Make sure to account for it (ask your attorney how to list/if you can adjust withholdings)

Home security: do you have ADT or the like?

Vision: eyecare / exams, glasses, contacts

[lolly78]

So Pandora,

Did your attorney use your schedule j to calculate your DMI? Was there a big difference between the two schedules?My attorney makes it seem like we need to include whatever we can on the means test, and almost like the schedule j doesn't matter because our payment would be based off the means test.

[Pandora]

lolly

We were under median, so... however we did the means test for giggles and it was negative DMI due to SSD income not being counted - however... our Schedules showed positive DMI due to my SSD, so therefore ours was based solely on our Schedules.

As lrprn stated, it varies greatly district by district

Here are 2 great posts explaining means test / schedules / DMI calculation:

http://www.bkforum.com/showthread.php?55551-Calculating-DMI-Means-test-or-Schedules-I-amp-J&highlight=means+test+median

http://www.bkforum.com/showthread.php?67846-Means-test-vs-schedule-J-what-is-the-point&highlight=median+ch+13+dmi