Question about my friend who was forced into a 13 instead of a 7

[PaKettle]

I have a friend who filed Ch. 7 but they told him he has too much income left over and so has to file a 13.

The thing is, he is paying child support but he is single.

So does that mean he has to qualify with his income as a single person in the median income chart, even though he is actually supporting 3 kids?

Seems to me that isn't really fair, since he is contributing to their support he should count as a family not a single person.

I'm not really totally clear on all his numbers, all I know is that he is $10k or so above the median income, because he is considered "single".

The other thing is, he is not paying much rent right now because he is staying with his sister because since his recent divorce and because of bad credit, he has not been able to afford to rent an apartment.

This guy has I think $400 left each month, after paying bills; BUT he is not renting an apartment which would run him a minimum of $1200/month in this area. At his 341 they made him convert to a 13.

So... I don't get why he couldn't qualify for a Ch. 7. Seems to me all he'd have to do is rent an apt. and voila! he would qualify! But wouldn't his attorney have told him that, if that is the case?

Just curious... Makes no sense to me as to how this guy didn't qualify for a 7 - he has a big child support payment (3 kids) and only makes about $10k a year over the median for a single person.

[HHM]

This is tough situation.

Unless he is primary custodian, then yes, he has to qualify as a single person. But I thought there was a way to back-out child support payment in the means test. Hopefully, someone else can chime in on that issue.

[needafreshstart]

It might be possible the attorney wanted it to be a chapter 13, they do make more money that way. I know my attorney kept telling me the differnce between schedules I and J were more important than the means test in determing whether to file a 7 or 13, which I disagree with. Several times he made the comment a chapter 13 is just as good of an option as a 7. I'm not positive how it was to be filed, but he ended listing me as a 3 person household since I anticipated getting to claim 2 of the kids for tax purposes, even though my kids live with their mother several hundred miles away. In a 1-person household I would have been over the median income, not sure how much. I would be curious to find out how he fared on the means test.

[PaKettle]

Thanks.

This is tough situation.

Unless he is primarly custodian, then yes, he has to qualify as a single person. But I thought there was a way to back-out child support payment in the means test. Hopefully, someone else can chime in on that issue.

Thanks for the info. I'll see if I can get more info from him as to how he fared on the means test.

I am pretty sure the attorney did not arbitrarily "want" him to go to a 13, I am familiar with the attorney. But it seems to me that maybe the attorney did not do a good job of explaining how he might change his expense profile in order to qualify for a 7... which is what I am trying to figure out. Since he is paying little rent now, couldn't he raise his rent and qualify for a 7?

Can he still do that, once he's in a 13 or ... what can he do to qualify for a conversion to a 7 now that he's in a 13?

[HeatherB]

You know, I wasn't forced into a chapter 13, but I was originally in one. Then I lost my job and had another child - that's what really put me over the edge.

Honestly, if your friend could somehow make less money for a while (temp leave of absence and work at a small income job) then his paychecks could not be deducted and they would sent him a notice to either pay it all up or become discharged with prejudice. (very bad thing). He could then possibly take the means test again (with a rented apartment) and apply for a conversion. Unfortunately, this will cost him more money. But it may be better than what he has to pay in his 13 plan.

I don't know the whole situation so I am actually NOT suggesting this as a course of action. However, for some it may work, for others it may not. Just brainstorming.

[PaKettle]

You know, I wasn't forced into a chapter 13, but I was originally in one. Then I lost my job and had another child - that's what really put me over the edge.

Honestly, if your friend could somehow make less money for a while (temp leave of absence and work at a small income job) then his paychecks could not be deducted and they would sent him a notice to either pay it all up or become discharged with prejudice. (very bad thing). He could then possibly take the means test again (with a rented apartment) and apply for a conversion. Unfortunately, this will cost him more money. But it may be better than what he has to pay in his 13 plan.

I don't know the whole situation so I am actually NOT suggesting this as a course of action. However, for some it may work, for others it may not. Just brainstorming.

Thanks. I'm going to encourage him to come on here and see if he can explain it all in detail and ask for suggestions. I am thinking his attorney just did not explain to him what creative options he might have for getting himself qualified for a 7 instead of a 13.

Thanks for the replies. If anyone has any other ideas let me know here and I'll pass them along.