Just filed Ch7 - going to get audited?

[zakaddy]

Hey everybody, its great to hear some of the successes on here and it definitely gives me hope! I just found this forum today and have been going nuts trying to read all the posts and try and apply them to my situation and ease my worrying a bit. Needless to say, my head is spinning. Honestly, I've got to say that some of the stuff on here both puts my mind at ease and terrifies me at the same time. Hah.

I actually filed for Chapter 7 yesterday (in NY state)... A few weeks ago I decided I needed to finally "take the plunge" on a whole bunch of bad decisions and issues that have been plaguing me for years. (job loss, divorce, the usual suspects) so I picked a local lawyer and met with him a few times, and then we ended up filing a Ch7.

My situation is - I'm 29 have NO assets a ton of debt and have been dealing with a garnishment (the 10% NY state max) for the past year.

What worries me is that when we went over the means test he said that I "barley" made it and am pretty much right on the line for a Chapter 7. He told me that it basically means that I WILL be audited. Now I don't know 100% what that entails - but I'm stressing about the whole situation already and worrying about that just makes it worse. I mean, if he thought that I wouldn't be able to get discharged, he wouldn't have filed, right? If I was a lawyer, I wouldn't want to LOSE all the time! Right?

Do the things I pay for and do NOW (post filing) have any impact on this whole process, or will it be 100% about the 6 months prior to filing?

Thanks guys.

[keepmine]

What exactly are you doing and paying for now?

[zakaddy]

I'm not doing anything out of the ordinary - just paying bills and living expenses (rent, gas, food, car insurance, cell phone, utilities, furniture payment from Aarons, etc.) Nothing terribly exciting.

What do I need to worry about going into this if I "just barely" squeaked by the means test because of my income?

I hear things about donating money regularly, and other things that look really favorable in the 'allowed expenses' category. Not sure if that sounds shady....

Has anyone been in this position before?

[keepmine]

The means test is only part of the hurdle. What sort of disposable income did you show? Many here have been over the median but, were discharged because they had no disposable income to fund a Chapter 13.

[zakaddy]

I want to say that it showed I had around 100 or so in disposable income - which is why he suggested that I look into some regular donations, life insurance, disability insurance, etc. (not like I can really afford any of that - but hey, whatever works) I also pay some of my bills in cash and don't have receipts got some things... I suffer from a general disorganization sickness.

I'm just afraid that they're going to nail me up against the wall because I'm "on the line"...

Also, I don't have to do anything about the garnishment - it should go away now that I've officially filed, right?

[keepmine]

If you're in the $100 ballpark, you should be OK. Imsurance is a viable expense.
Once the judgment creditor receives notice of the filing, they should halt the garnishment.

[cetiya]

?????

[zakaddy]

In terms of being audited and scrutinized by the trustee - do the things I pay for and do NOW (post filing) have any impact on this whole process, or will it be 100% about the 6 months prior to filing?

Like if I'm donating money, paying medical bills I didn't have a few months ago, etc.?

[rfassett]

Think of filing bk like taking a picture - a snap shot. The bankruptcy estate is established on the day you filed for protection under the bk code. What happened before that is included in the picture. What happens after, is not - at least to the extent that there was no malfeasance or fraud leading upto or post-filing. Now, that said, you are protected by a "stay of execution" on debt collection while your bk is pending - until dismissed or discharged. What you do after the bk filing does not impact your means test. That is based on the activity for the six months prior to filing.

To maintain sanity in the bk world, you have to always consider and accept the "worst case scenario" in your case. For you, being on the bubble, the worst case scenario, most likely, is that you would get converted to a chapter 13 if the 7 did not fly.

[gophermn]

As for the means test, keepmine is correct. That is just one piece of the puzzle. I filed CH7 and was WAY OVER the median income. Not even close, yet our expense were about as large as a third world country so we were still able to stay within the CH7 guidelines.

Now this doesn't mean the US Trustee can push me to a CH13 because I still have 6 weeks before discharge - but - thats why I hired an attorney to do all the number crunching - legality stuff. Pay for what you want to keep and quit paying for what you don't want to keep.

Welcome to the forum. You will find a ton of knowledge and awesome people who (believe me) have walked in your shoes!!

[zakaddy]

Thanks everybody. Its definitely a comfort to have a resource like this available. Without it I'd go back to what I was doing a week or so ago... leaving the lawyers office with a blank stare after being filled with quick talk lawyer-speak because I nodded my head like I understood.

I guess my worry is that if they really dig (depending on what kind of mathematical witchcraft my lawyer used on the submitted means test forms), I'm not sure how to "prove" my expenses. I'm not a big check writer and I used cash for lots of things - I hardly ever keep receipts, etc. etc.

oh well, I guess like rfassett said - worst case I get changed into a Ch13 and have to pay 100-200 a month for 5 years won't be the end of the world...

But going from a ~$400 a month garnishment to a $200 Ch13 payment would be pretty anti-climactic.