Confused about means test vs. schedule J

[Buckeye060]

How do I know which one to use?
Can I use the one that benefits me the most?
What determines what I use?

[duplantisjj]

There are better experts on this forum than me, but I just went through this so I'll give it a shot:

Whether you use one or both (means test and sch J) will depend on your type of filing, commercial vs consumer debts. Means test is not required if your debts are primarily commercial in nature.

Schedule J is a required schedule. It is based on your "projected" income and projected expenses for the next 12 months following your filing date. Sch J should include your actual expenses, deductions, costs, computed over the next 12 months.

The means test, if required, is a snapshot of your last 12 months financial situation before the filing date. You use tax returns, past paycheck stubs, etc., to show income received over the last 12 months. You can also use IRS deductions (or actuals, whichever is higher) to show how much money you used to pay bills, mortgage, food, etc. If you earned more than the median salarly for your area, then you have to fill out the next section in the test which calculates how much you have left over each month after all bills and deductions. If you end up with I think...$182 or more each month then you do not qualify for Ch 7 and would be a Ch 13 candidate since you can qualify for a repayment plan.

Also, the bottom line numbers from Sch J and the means test will likely be different, since one uses past numbers and one uses future projections.

[Phillymanhere]

You have to fill out both of them.

[soleprop]

buckeye it is confusing when you start more than one thread with the same root question, just fyi. i replied to your other thread regarding the question, and phillyman is right; you have to fill out both of them - even if you are filing nonconsumer CH7 you still need to complete some of the means test.

[baguy]

I'm also confused about this....I've read several threads and don't seem to get a solid answer.

So if we pass the means test (IL) no problem using all the standard expenses (exept for mortgage, which will be more than standard but should be allowed from what I read), but on schedule J with "projected" income we have $1000 left over every month, then what happens usually? Are the numbers on schedule J usually fudged around a little to get closer to $200 left over a month? Or are you pretty much forced into a 13 at this point?

Specifically for me, I'm married filing single in IL. All the debt is mine. How do they determine what percentage of my spouce's income goes towards the Household contribution? If my spouce likes to spend $500 a month on clothes for herself, is that allowed? Or is she not allowed to have any "personal spending" on either the means test or schedule J that does not directly go towards the household contribution? This and the means test vs schedule J are the two most confusing things to me. If anybody can clareify or if anybody has any experience with a situation like mine, I would love to hear about it. Thanks!

[Phillymanhere]

You are asking two dramatically different questions: one on the means test and the other on the ins and outs of filing singly while being married.

There are tons of threads on both of these questions and that may be why you are not getting all the answers you want. Just go through old threads and you'll find a hundred in the last six months on these questions. Just read away and you'll be up to speed. Occasionally the responders here get tired of answering the same questions over and over again. Also note that you can do a search of this board for "married" and you'll see lots of threads on this.

One quick point: the married issue partly depends on what state you live in as bk law is different in each state. Also, the board generally recommends you meet with 3 to 5 lawyers for initial consultations. These meetings will help you get informed about the law in your area and how the law is enforced in your area.

Regarding the means test and Schedule J, you're right, you cannot have more than about $150 left over at the end of the month once you list your real expenses on schedule J. Now there is a certain amount of fiddling with the numbers. Unless you've read a lot on this board, it is likely you are not filling out the schedule J correctly and very likely you are dramatically UNDERestimating your expenses. For example, in the past year, I've spent at least $2,400 on my car in car repairs ... that's $200 a month I can put down. Gas is another $200 to $250 a month. Monthly car insurance, renters insurance. Clothes ... I can prorate the amount I should be spending for clothes if I wasn't living paycheck to paycheck. Bk filers are usually way off in estimating their expenses ...

Again, do a search through old forums or search for Schedule J and you'll find dozens of threads on this that answer all your questions here.

Good luck.

[soleprop]

great advice, phillyman!