Received Draft Petition - Confused Model Plan or Means Test as to Amount We Pay???

[CAJ]

I just received a draft of our petition from the paralegal, they are gone for the day otherwise I'd be reaching out to her, but for now I'm freaking out. She keeps saying that the "Means" test provides the number we will be paying monthly. On our means test line #59 says that our disposable income is $1,159.93. Just for the record we don't have that much left over, that much I know. BUT.... on the Model Plan in the petition it has us in Section A saying that we have $635.03 a month left for plan payments. Then in section D it says we will pay trustee $688 for 60 months. This sounds more like it. Any help would be great - thanks. Also says under E Trustee's fee's would be $2,146.80. Is the model plan all for nothing and they just go by the means test? Help - please!!!! Thank you.

[LadyInTheRed]

It sounds to me like your payment is going to be 635.03. "Model Plan" means that your attorney followed the local court's format for the plan. You must have expenses that exceed what is allowed on the means test or you expect a reduction in income.

ETA: Another couple of possibilities: Is that $635.03 a month enough to pay all secured debt included in the plan and 100% of your unsecured debt.

There also could be an error somewhere. Look at the numbers filled in on the means test and Schedules I and J to see if there are any errors.

[CAJ]

Thanks for the reply. We do have expenses that exceed the amount allowed. Child care for one - does that count for anything? From what I gathered from our paralegal she basically said some of our expenses were higher than what was allowed so we are out of luck? Doesn't make sense to me - so confusing. If the money isn't there, the money isn't there. The $635 is not enough to cover all secured debt we are near $150k. I will compare numbers between schedules - thanks so much.

[LadyInTheRed]

Line 30 on the means test allows you to include your actual childcare expenses.

It is true that for purposes of the means test, there are many local and national standards that cannot be increased. So, if your expenses are higher in certain areas, you are out of luck as far as passing the means test is concerned.

But, if your actual expenses are higher than allowed on the means test and those expenses are "reasonably necessary", then your plan payment can be lower than the disposable income on the means test. But, you should be ready to document your expenses in case the trustee challenges them.

[justbroke]

The Means Test isn't used for anything but coming up with a basis for your plan payments. Your actual plan payments are based on your Schedule I and J, combined with some finesse, a hail Mary, and some good ole fashioned luck. (Just kidding on the luck part.) Your attorney then creates a plan, either using the Model Plan for your District (if required) or an ad-hoc plan. (Most attorneys use what ever stock plans are in the Best Case software package, or some other bankruptcy petition software.)

You pay whatever is confirmed. If your plan says to pay the Trustee $688 a month, then that is what you will pay. Perhaps you have some things being paid "outside" the plan (not through the Trustee). You really need to speak with your attorney and have them review all the numbers with you until you are comfortable.

[CAJ]

Thanks so much. Attorney hasn't really been available in all this, we are kind of ticked. We've been dealing strictly with his paralegal and while she's very nice, after reviewing the Means Test with a microscope last night I realized it was filled with number errors. Had wrong amounts for car payments, didn't include husbands pension, union dues. Didn't use updated numbers I had sent to her in early March. Obviously a very rough draft. I marked it up and sent back to her this a.m. So frustrating. Thanks for the feedback. Appreciate it.

[spidge]

I can only share my experience here so mileage varies. We were also dealing with an assistant in the office and found a couple errors. This person became a bit defensive as if I were telling her how to do their job, but I stuck to it. So over the phone I talked her through a few points of concern and she agreed on the spot about two of the points. I had to have her ask someone else to look at her work to check the figures concerning the third point. Thank goodness the attorney was standing there as she noticed the assistant's frustration and asked what was wrong. It took the attorney two seconds to see what I was referring to and all was well. All three points cut my payment considerably.

Stick to it and don't let them file until you understand why the payment is what it is.

[LadyInTheRed]

Yes, definitely stick to it. An attorney should be reviewing everything the paralegal does. So, if something doesn't seem right and the paralegal doesn't agree to revise it or give you an explanation that makes sense, don't hesitate to insist she run it past your attorney. Or, better yet, ask to talk to the attorney directly.