Not enough disposable income to fund a chapter 13?

[MetsfanTom]

I have been reading all the posts on this forum for a while, and I thank everyone for all of their insight and encouragement as well. I have an appointment for an attorney for March, but as always I analyze and stress over everything, and my financial situation is no different.!!!! After doing all of my calculations it appears that I will have about $150 to $200 in disposable income after doing the schedules I and J, which I guess would disqualify me from a chapter 7. However I have two TSP loans which I'm paying on, which of course can only be included in a chapter 13, and the amounts on those loans totals $600. Therefore I would have a negative disposable income for a chapter 13. What happens in a case such as this, where I might not qualify for a 7, but have no disposable income for a 13? On a side note I'm completely confused about the schedule J, so perhaps someone could explain this to me as well. For instance how am I to know what my car maintenance or house maintenance will be going forward? I was fortunate enough to not have many expenses in those areas recently, but as everyone knows, that can change in an instant. Is there an allowable amount I can put in for those expenditures, or will they want proof of those expenses? Thank you in advance for all of your thoughts and responses.

Tom

[LadyInTheRed]

Be careful about deciding for yourself that you can't qualify for a Chap 7. If you have no reason to prefer a Chap 13, then you want to go into meetings with attorneys with the goal of filing Chap 7. If they don't think you qualify, let them tell you that. You should consult with at least 3 attorneys before choosing one.

If your disposable income without the loan payments is under $200, you may still qualify for a Chap 7. Before looking at Schedule I and J, you need to determine whether you pass the means test. Here's a calculator that will help: http://www.legalconsumer.com/bankruptcy/means-test/

If you pass the means test, than the trustee will look at schedules I and J and decide whether to object to a Chap 7 discharge because, based on a totality of circumstances, you can pay a significant amount to your unsecured creditors in a Chap 13. While you can't include the loan on the means test, you may be able to include it on Schedule I or J. That is something you should ask attorneys at your consultations because it will depend on whether there are any ruling in your circuit on the subject and, if there aren’t, how the local trustees view the issue. Also, even if you don’t pass the means test, it is possible to override the presumption of abuse.

As far as car and home maintenance, if you haven't had those expenses recently, you need to come up with some estimate of what is reasonable. The standards allowed on the means test can be a good guide. The trustee will only want proof if the expenses seem unreasonable. Once you hire an attorney, the attorney can help you determine what is and is not reasonable.

ETA: Because of the way the means test works, it is possible for somebody paying on a retirement fund loan to not qualify for a Chap 7 discharge but not be able to fund a Chap 13. If you are potentially in that situation, it is important you find an attorney who is willing to fight for a Chap 7.