Failing means test - Is Ch 7 still possible?

[anewbeginning]

I initially thought I just passed the preliminary means test. However, I made an error when calculating my income and I actually fail the means test by $74! (Waiting a month to file will make matters worse because I am due to receive an annual bonus of $800 in March. Not a windfall, but still income, and I am planning to file in February.)

It's still possible to file for chapter 7 if one fails the means test, but what is the probability of having success doing so? I'm guessing it's more likely that the court would convert my case to chapter 13 because I don't have "special circumstances" such as anticipated loss of income, out-of-the ordinary expenses, etc.

Thanks in advance for your advice and opinions! Members of this forum have been tremendously helpful and I am very appreciative of the advice and support.

[phoenyx]

I haven't spent a lot of time focusing on the means tests. I, fortunately or unfortunately depending on your point of view, have no income over the past 1.5 years. However, I have to think that if you're that close, a bankruptcy attorney should be able to help you out. I really don't know for sure, but I would have to assume you could find $74 somewhere to help you out. Have you talked to any attorneys? Many of them will provide initial consultations for free, even.

[anewbeginning]

I'm not sure what you mean by finding "$74 to help me out".

As I understand it, if your income falls under the magic means test number, you're likely safe to file and can reasonably expect to receive a discharge barring fraud, extenuating circumstances, etc.

If your income is higher, you have to prove that your expenses are greater than the allowable expenses, correct? The bank will be taking my house. My credit card payments will be gone. The only way I can see my expenses being higher than the allowable expenses is that my rent will be higher ($900) than what is allowed in my county ($748).

My car will be paid off in a few months - I only have a payment of $165 and I can't buy a car now because my debt-to-income ratio is too high. I've seen people recommend buying a new car before filing (my attorney also said that's good advice), but that's probably not an viable option. This may also work against me if the trustee sees that I have no car payment even though it's on its last legs and may die any day.

I had the initial free consultation with an atty. and I go back on Feb 5th with my paperwork and retainer. The problem is that I told him that I just passed the means test because I truly thought I did. Now I have to tell him that I made a mistake. I'm hopeful that he can help, but I guess I'm just afraid that I will be forced into Chapter 13 because of a few dollars.

[CATCHMEIFYOUCAN]

There is no such thing as "pass or fail," when it comes to the Means Test.

The Means Test just shows much disposable income you may have to fund a chapter 13 (whether its positive or negative) with a set of figures according to IRS Standard of Living based on the State/City you reside. The real answer lies within schedules I and J.

FOR EXAMPLE: I took the Means Test, I ended being NEGATIVE -$60 bucks, HOWEVER, schedules I and J proved I had plenty of disposable income $800!

When Congress added the Means Test to the mix, little did they realize what kind of effect this would have since the New Bk Laws took in effect Oct 2005? 2006? They left it up to the judges to decide. Most judges - it seems - as well as the Trustees went with your real schedules (I & J).

Sucks, eh?! But you have a chance to redeem yourself BEFORE you file the paper work. Just have the Lawyer re-do the test. Nothing is set in stone until your paperwork gets filed.

Best of Luck, Catchmeifyoucan

[kl030505]

ok, first, if you file in Feb, your $800 bonus in march won't matter. What matters is income from 6 months from date of file.

here's how I understand what happens in a chapter 7. If you are above the median income, if you fill out schedules I and J and have a certain amount left over, is that amount equal to a certain percentage of your total debt. For example, we have about $85K in consumer debt (most of which is student loans and non dischargable ). If at the end of I and J we had enough left each month to pay back most or all of the $85K in 5 years, we would be pushed into a chapter 13.

HOnestly, I think you should speak to an attorney, because I'm not sure I explained that right, but if you are this close I think it makes sense to pay the attorney fees and make sure they take care of you.

[nazstar]

anewbeginning -
Are you SURE you can't get a car loan? We had a car on it's last legs and our attorney told us to get a new one. My husband's FICO score was in the low 500s and he got a loan through cap one.