Totality of Circumstances

[DivorceRuinedMe]

Anybody pass the median income test and then have the Judge look at Schedules I and J and object (totality of circumstances thingamajigy?) I haven't actually done my schedules I and J yet - planning to do it this weekend. I'm just wondering how many people had this happen? Was your disposable income over the $166 amount (or $100 amount or whatever it is - LOL)?

[demismom]

I haven't filed yet, but our attorney sent us our petition to review (we're also under the median). With the figures they had on the schedule J specifically she put a note on it that said we need to find $550 of expenses, let us know what should be higher. There was a lot they had lower than what we paid and something things she didn't have at all (like life insurance or our business expenses). By the time I got it all filled out for her, we are $33 under, BUT if some of the expenses don't fly with the trustee/judge we're actually over by a couple hundred dollars.

I guess what I'm saying is my attorney wants us down to $0 disposable income and I'm worried we won't be.

[jal1129]

Our attorney told us we HAD to be in the red on I vs J.

[BKTango]

Our lawyer "tweaked" our expenses to get us directly under $100 disposable (we were showing $130) he also just moved things around and lowered this category or increased that category. He knew what would look fine (a larger food and clothing budget) and what wouldn't (pet expenses). Most lawyers will tend to mess with your expenses a tad.

Just make sure you do not forget any and all expenses you have. Check reorders for your bank, stamps, haircuts, etc. you will find a way to chew up a few dollars.

[HHM]

Actually, it generally works the other way...since no one in the BK community really likes the new law...judges use the "totality of circumstances" test to --help-- debtors stay in a chapter 7, not kick them out.

But as a general rule, you need to show a budget defecit (and your expenses need to be reasonble).

[DivorceRuinedMe]

In my situation, we have two 3 year olds that would really benefit from being in a school situation. My soon-to-be new husband is staying home right now and not working partly to keep us under the median but also because we have a 3 month old and the two 3 year olds that would be in daycare if he were working and his salary would pretty much just be paying for the daycare anyway so we decided to just keep them all home with him. (We also have a soon-to-be 5 year old that will be in kindergarten starting in August but will still incidentally need before and after school care which is where my husband comes in.)

My question is - do you all think that a school expense for the two 3 year olds would be questioned as excessive? I am just worried that the judge will be like - your husband is not working, so why can't he watch the two 3 year olds with the infant? My husband would have to stay home anyway to care for the infant so it's not like he's sitting at home and not working just to get us under the median. We both feel like it would be really beneficial for the two three year olds to go to school at least part time but this costs $$$. And if the judge is just going to look at that expense and be like - um, no way, then we will keep them both home and forget the whole thing. I'm just trying to find ways to spend any extra money that we may have if it can't be explained away by other things.

We are a family of 6 under the median by about 2K per year and we've only just started all living together so we really don't know what our true expenses are just yet. We plan to start keeping track on May 1st but until then, I'm just worrying myself sick. I mean, we have a budget and all but it's REALLLY lean. We both agreed to live frugally and not get ourselves into this mess again (well really it was my mess caused mostly by my divorce) so we have a pretty tight budget. We wanted to be able to save a little for the future so that's why the budget is so tight. I guess we could spend a little more until we file and then cut back after the bk. With 4 kids, I'm sure that won't be hard! Ugh - this waiting and not knowing is just awful. I need to just have faith that it will all work out.

[NYCountry]

I can't help with your questions but I do know that children need to go to school earlier and earlier now as there is too much to learn now-s-days and they need to get a head start so I don't know why anyone would judge your children having a jump on education.

[CATCHMEIFYOUCAN]

Median Test

Anybody pass the median income test and then have the Judge look at Schedules I and J and object (totality of circumstances thingamajigy?) I haven't actually done my schedules I and J yet - planning to do it this weekend. I'm just wondering how many people had this happen? Was your disposable income over the $166 amount (or $100 amount or whatever it is - LOL)?

My Median Test proved I was in the negative (-$60) HOWEVER, schedules I and J proved positive ($800). My attorney proposed a "good faith plan," of $250 payback, but the Trustee wouldn't have it, he wanted the $800 AND the judge wouldn't decide it. So my choice was pay back $800 the next 5 years OR just quit one full time job, fall below the median and convert to Ch7 AND PAY NOTHING! YOU DO THE MATH!

Good Luck, CatchMeIfYouCan

[lrprn]

My question is - do you all think that a school expense for the two 3 year olds would be questioned as excessive? I am just worried that the judge will be like - your husband is not working, so why can't he watch the two 3 year olds with the infant?

Day care for all the children of two working parents is one thing, but having a stay-at-home parent watching some of your children with two more in a 'school situation' day care is another. I would discuss this one with your lawyer and follow his/her advice.

[SinkingFast]

I agree with Lrprn on this one. Definitely run this one by your attny.

Pre-school tuition for 2 children may not be an acceptable expense in the eyes of your BK Court.

[Granny]

Being a stay-at-home grandma, raising my grandkids, with hubby away all but 36 days last year, I put my sweet little darlings in a Mother's Day Out program. They are in "school" two days a week, from 9-2. The benefit for them is the opportunity to socialize with other children, give them a head start on the learning process and the benefit for me is a few hours break, which is the biggest benefit of all. I use the time to clean the house without someone right behind me making a mess, buying groceries without them adding to the cost, and of course to work in my home based business.

The cost is slightly less than what I earn after taxes and expenses with my work at home business. Therefore, the expense is justifiable to the trustee, without any explanations needed.

I believe if you can show your stay at home dad with an income that is equal to or just above the cost of the day care, you could get the cost through without question.

Given my situation with hubby gone almost all the time, I consider it a mental health cost, but I'm not sure anyone else would buy into that.