Motion to dismiss 2 hours before 60 day deadline

[BrokeinCA]

I just received notification from pacer that a motion to dismiss has been filed.... 2 hours before my 60-day deadline.

Reasons given:

: (a) the Debtor’s tax withholdings were decreased to match her actual liability; (b) the Debtor’s 401(k) contributions were removed for the purposes of this analysis; and (c) the Debtor’s tax payments were disallowed for the purposes of this analysis.
When considering a 5 year plan, the above noted adjustments leaves the Debtor with monthly disposable income of $632.41. Under the analysis performed by the United States Trustee, it appears that the Debtor would have sufficient disposable income to return 44% or a pot of $24,128.61 to her currently scheduled unsecured creditors over a 60 month period. (See United States Trustee’s Financial Analysis attached herewith as Exhibit “A”). The Debtor provided no information as to any upcoming increases or decreases in income and/or expenses on Schedules I and J

My attorney is reviewing, but I can only determine that they adjusted my taxes due to a refund I received in the amount of $4056 for 2018. This was the result of points and funding fees paid for the purchase of my new home from the sale of my previous home. After the IRS took that refund, I still owe over 6k to the IRS. They also aren't allowing the $100 I pay monthly to the IRS. Finally, the schedule states that my deductions should be adjusted giving me an additional amount of $5359 per year in take-home pay that is currently being taken out of my paycheck for taxes. Any idea how they come up with this amount? I'm a household of 2. I claim 2 on my W4. I'm confused and frustrated at this point.

I guess I better start researching what to expect with the dismissal of my chapter 7 and prepare for chapter 13.

[justbroke]

Tax adjustments are the first things that Chapter 13 and the UST looks for when determining DMI. If you received a refund, then what you claimed as taxes on your paycheck does not represent your actual tax liability. Most debtor attorneys will take your refund -- or average refund -- divide by 12 and then add that back as income. That way you're not going to be surprised when the UST or Chapter 13 Trustee does the same.

As for your $100 IRS payment, that is certainly excluded as a separate expense, as the IRS is treated as a priority creditor automatically and all priority debt will be paid. It should already be calculated on the Means Test.

I do not know how large your 401(k) contributions are, but if you also have a 401(k) loan, many jurisdictions will remove the 401(k) contributions as a reduction in your current monthly income (CMI) calculation. It comes down to the fact that most jurisdictions allow you to have either a contribution or a loan, but not both.

As for your household of 2, you may be receiving other tax breaks such as the child tax credit or even the unearned income credit. Your attorney will need to review whether any of those tax credits are excluded from the calculation of income.

Your attorney may be able to fashion an opposition to the objection with respect to the taxes if they come from a protected tax credit class (such as the unearned income credit) and that it shouldn't have been used. Your attorney may also attack the 401(k) contribution reasoning if you don't have a 401(k) loan outstanding.

I had the spreadsheet that the UST used about 8 years ago. It was used by the UST to calculate the "actual" disposable monthly income. It is in my blog, but I think it's too old and unavailable. The UST's sheet basically looked like that below. It compares what the debtor scheduled, versus the UST's "change" versus what the UST believes that it should be (UST Computation).

As you can see, they can go through and adjust any portion that they deem necessary.

	22A Line #	Original 22A Stmt.	U.S. Trustee Changes	U.S. Trustee Computation
Gross wages, salary, tips, bonuses comm	3	$ -	$ -	$ -
Business Income	4c	$ -	$ -	$ -
Gross receipts	4a	$ -		$ -
Ordinary and Necessary expenses	4b	$ -		$ -
Rental Income	5c	$ -	$ -	$ -
Gross receipts	5a	$ -		$ -
Ordinary and Necessary expenses	5b	$ -		$ -
Interest, dividends and royalties	6	$ -	$ -	$ -
Pension and retirement income	7	$ -	$ -	$ -
Contribution to household expense (child)	8	$ -	$ -	$ -
Unemployment compensation	9	$ -	$ -	$ -
Income from Other Sources	10	$ -	$ -	$ -
a.	10a	$ -		$ -
b.	10b	$ -		$ -
Total Current Monthly Income	12	$ -	$ -	$ -
Marital Adjustment	17	$ -	$ -	$ -
Current Monthly Income	18	$ -	$ -	$ -
Annualized Current Monthly Income	13	$ -	$ -	$ -
Applicable Median Family Income	14	$ -	$ -	$ -
Deductions Under IRS
Food, Clothing, Household, etc.	19a	$ -	$ -	$ -
Health Care	19b	$ -	$ -	$ -
Under 65 years of age	19b	$ -		$ -
65 years of age or older	19b	$ -		$ -
Non-Mortgage (Utilities)	20a	$ -	$ -	$ -
Mortgage (Housing)	20b	$ -	$ -	$ -
Housing/Utilities Adjust.	21	$ -	$ -	$ -
Transp. - Operations	22a	$ -	$ -	$ -
Transp. - Operations Standard	22a	$ -		$ -
Vehicle 1 Qualify for Extra $200.00	22a	$ -		$ -
Vehicle 2 Qualify for Extra $200.00	22a	$ -		$ -
Add't Public Transportation	22b	$ -		$ -
Transp. - Ownership 1	23	$ -	$ -	$ -
Transp. - Ownership 2	24	$ -	$ -	$ -
Taxes	25	$ -	$ -	$ -
Taxes from Payroll	25	$ -		$ -
(Over)Under Withholding	25	$ -		$ -
Other Tax Adjustment	25	$ -		$ -
Payroll Deductions	26	$ -	$ -	$ -
Life Insurance	27	$ -	$ -	$ -
Life Insurance - Payroll Ded.	27	$ -		$ -
Life Insurance - Debtor Pmt	27	$ -		$ -
Court Ordered Payments	28	$ -	$ -	$ -
Court Ordered Payments-Payroll Ded.	28	$ -		$ -
Court Ordered Payments-Debtor Pmt	28	$ -		$ -
Education for Disabled Child	29	$ -	$ -	$ -
Childcare	30	$ -	$ -	$ -
Healthcare Excess	31	$ -	$ -	$ -
Telecommunications Services	32	$ -	$ -	$ -
SUBTOTAL IRS	33	$ -	$ -	$ -
Additional Expense Deductions
Health, Disability Insurance	34	$ -	$ -	$ -
a: Health Insurance Payroll Ded.	34a	$ -		$ -
b: Disability Insurance Payroll Ded.	34b	$ -		$ -
c: Health Savings Account Payroll Ded.	34c	$ -		$ -
d: Health & Disability paid by Debtor	34	$ -		$ -
e: Health adjust to actual amount	34	$ -		$ -
Care of Household or Family	35	$ -	$ -	$ -
Family Violence	36	$ -	$ -	$ -
Additional Home Energy Costs	37	$ -	$ -	$ -
Education for Dependents	38	$ -	$ -	$ -
Additional Food & Clothing	39	$ -	$ -	$ -
Charitable Contributions	40	$ -	$ -	$ -
Cash Contributions-Debtor Pmt	40	$ -	$ -	$ -
Cash Contributions-Payroll Ded.	40	$ -	$ -	$ -
SUBTOTAL ADD. EXP.	41	$ -	$ -	$ -
Deductions for Debt Payment
Future Secured Claim Payments	42	$ -	$ -	$ -
Secured Claim House & Car - Above	42	$ -		$ -
Secured Payments - Other	42	$ -		$ -
Past Due Sec. Claim Payments	43	$ -	$ -	$ -
Priority Claims Payments	44	$ -	$ -	$ -
Chapter 13 Administrative Exp.	45	$ -	$ -	$ -
Estimated Chapter 13 Plan Payment	45	$ -		$ -
Estimated Non-Chapter 13 Plan Exp.	45	$ -		$ -
SUBTOTAL DEBT PAYMENT	46	$ -	$ -	$ -
TOTAL INCOME	48	$ -		$ -
TOTAL DEDUCTIONS	49	$ -		$ -
MONTHLY DISPOSABLE INCOME	50	$ -		$ -
60-MO DISPOSABLE INCOME	51	$ -		$ -
Total Unsecured Creditor Claims (Sch. F)	53	$ -
25% of Total Unsecured Claims	54	$ -

[BrokeinCA]

Thank you so much justbroke. Still waiting on a response from my attorney. He has a call into the UST office. It does look like they made the adjustment based on the tax refund I received, but again this was only due to the points that were paid due to my home loan. I redid the taxes taking out the points to see what I come up with an I do not receive a refund. I've shared this with the attorney and hopefully, that helps. Otherwise, I will be in chapter 13.