Trustee objection?

[lrprn]

I am referring to Schedule I also.

I'm very familiar with this Means Test vs Schedule I&J circumstance because we ended up precisely in this situation with a trustee objection in our own Ch 13 - a sizeable mismatch between our disposable income on the Means Test vs the disposable income showing from Schedule I & J, so we became a test case for our district. In our case, during the 15 months between our filing and our confirmation, our Ch 13 trustee NEVER asked once about how much we were making AFTER we filed. He didn't care about our "projected" income even when he could have known exactly what we made for a full year after we filed. (Wouldn't have mattered if he did know - it didn't change.)

This is an area of rapidly evolving case law - my guess is we'll see many more case decisions coming out related to this issue over the next few years and this situation will become clearer over time.

But at least for now, income (actually to be accurate, CMI) is still calculated the same way for Ch 13 that is for Ch 7. The CMI (calculated monthly income) is figured from all sources of income for the six full calendar months prior to filing. To my knowledge (and I've searched extensively on this topic for 18 months now), no bk district currently requires a look into future income at this point unless specific case circumstances suggest abuse and the court looks at income both before and after filing as a part of the abuse investigation.

[jp2861]

What leaves me a little baffled is that two different forms are contradicting each other. One says what happened over the last 6 months and the next asks for true current, as of the filing date. It's definitely an area that has been left wide open for discussion. It amazes me that it wasn't seen during the policy changes. Especially a 6 month look back. That's got to be the area of finances that will change the most for someone that files. Actually, in some cases, it hurts the filer when it isn't their fault. Example: Someone took 5k out of their 401K or mutual fund 4 months before filing. Thats going to show as income for the 6 months. The day I file, my current income will be 2000 a month, but my income for 6 months will show 2833 a month (833 a month from the 5000 from mutual fund). It seems really screwy if the Sch I income amount is the exact same amount from the 22A, when in fact my true monthly income "at the time of filing" is only 2000.

So, I guess I'm still confused what amount is used on the Sch I. The 22A says 2833 after filled in. Yet, the Sch I says "at time of filing", which would be 2000.

This is what leads me to believe that the 22A is specifically to determine abuse from a median standpoint. And the I & J to determine disposable income. If my assumption is corect (and thats a BIG if) I can see how 2 different income amounts would be used. If not, it seems like a major contradiction between what the final outcome of the 22A is and the income "at the time of filing" is.

[needafreshstart]

The Schedule I form specifically states the monthly income on this form may not be the same as the motnhly income on scedule 22A. The way the means test is calculated (schedule 22A) I have no disposable income. That is with a secured mortgage mortgage that will be surrendered, without that I will still be close depending on how I can list deductions for income taxes. I am going through a divorce at the same time, filing jointly we always paid very little in taxes due to 3 kids and mortgage interest and real estate taxes. The lawyer said for the means test I can only deduct income taxes actually deducted from my checks for the last 6 months instead of what my actaul tax liability will be, I was slow on adjusting my deductions and anticipate oweing the IRS possibly a couple of thousand when I file my tax return. The reason I feel I could get put in a chapter 13 is since I have such a large negative amount on Schedule I, it will probably raise a red flag and they will look at everything closer. Like not allowing the secure payment on the means test and the tax issue I just mentioned. Then add to that my income for 8-12 months ago was quite higher. I was trying to do everything possible from filing BK, working 80-90 hours a week between 2 jobs. I may be wrong, but I think if there is a hint of abuse in the courts opinion they can go back and look at your income prior to the 6-months before filing and use that as a basis for the means test. My lawyer mentioned the court could look at what my income for the year instead of just the 6-month look back, which would more than likely pu me into a chapter 13.

[jp2861]

Whoa, everyone....slow down.

Schedule I uses this same income calculation. If Schedule I (income) minus Schedule J (expenses) is -$600, then there is no danger of a Ch 13 filing because there's no disposable income. What matters is how Schedule I compares to Schedule J, even if the filer's income is significantly over the median for his state.

Sch I doesn't use the same income calculation. Sch I uses your current (what your income is today) income amount. If your income today is lower than what the last 6-month average is then the lower amount is used on Sch I.

This according to my lawyer today. It makes sense. Someone can only compute a disposable income amount from current and projected future earnings. Despite what the 22A shows for CMI, disposable income (I & J computations) is computed by using the amount of your income on the date of filing.