What does a UST file if he disagrees with...

[BornAgain]

...which side of the Median Test we fall on? We're under the median income by less than $1,000 under one scenario, and over the median by less than $2,000 with another scenario.

In the over-median scenario we still can file a chapter 7 using the means test (a result of -$500/month) but we'd still like to file as under-the-median anyway.

So, if the US Trustee disagrees that we are under the median, what does he file? Adversarial proceeding? Motion convert to a 13 or dismiss? Something else? I'm wondering if it's just something that gives us the opportunity to file an amended Form 22A with the median test done "his way" and then the means test filled out also.

Thanks for your help.

[HHM]

It depends on what the rules are for the district as to what, exactly, the trustee files.

Generally, it will be a Motion to Dismiss or in the Alternative Convert to a Chapter 13. As with any motion, you have the opportunity to file an opposition.

I am not sure what you mean by the 2 different scenarios...what are the underlying facts that create the difference?

[BornAgain]

The difference is return of principle from three EE Savings Bonds we recently redeemed (the usual effort to stay afloat right at the end).

Clearly the interest is 'Income'. But the money we 'got back'??? That return of principle puts us above the median if it's included as income. My thinking on this is to analogize the EE Bond to a bank savings account. Closing out the bank account, one gets interest and the principle back. The principle isn't income (in the real world, anyway).

But I'm slowly learning that the CMI is a weird, ill-defined creature. Get paid $2,000; buy a $2,000 car; next month sell the car for $2,000. How much 'Income' is there? Seems one school of thought among US trustees is that there's $4,000 in income. Stupid? I think so.

Thank you for the help. :-) Filing Pro Se I wish to have a filing that avoids objection. This question I'm asking is to determine what I might face if a US Trustee disagrees with the EE savings bond principle issue. If I would just have to file an amended form 22A -- I can handle that and would consider filing under the median.

If what I would face from the US Trustee is difficult for a Pro Se filier to counter, and involves risk of dismissal or conversion, then I would file conservatively as over-the-median since our means test is -$500 something per month (with very conservative numbers).

Thank you so very much.

[HHM]

Sale of an asset is NOT income for purposes of BK. You liquidated an "asset" and now you need to spend the cash (an asset). Either you or your attorney is over thinking this

[BornAgain]

Wow. Series EE US Savings Bonds are assets? I guess I can see them that way, especially if they're unredeemed. Or maybe it was just the hypothetical car example you were referring to.

Series EE US Savings Bonds are assets, and their redemption is not 'income' for the median test? Surely the interest received is.

I was thinking of them more as financial 'accounts'.

I guess there's another question: Statement of Financial Affairs, Question 11, Closed Financial Accounts -- should the redeemed EE savings bonds get listed there?

Thanks!

[HHM]

Bonds are "Financial Instruments". You "buy" them. At some point you liquidate (Sell) them. The interest would be "income". But if you sell the bonds, the proceeds from the sale are not income for purposes of BK.

As for SOFA number 11; the sale of a bond is not a closing of a financial account.

[albacore44]

Bonds are "Financial Instruments". You "buy" them. At some point you liquidate (Sell) them. The interest would be "income". But if you sell the bonds, the proceeds from the sale are not income for purposes of BK.

As for SOFA number 11; the sale of a bond is not a closing of a financial account.

Would that also apply if a person were to cash in a portion of a 401K early and use the proceeds to live on until they are ready to file. I have a friend who was going to do that and I told him it would count as income in the 6 month look back period. also have seen some postings about unemployment insurance counting as income. some say yes, some say no, it's considered social security. any idea which is correct ??

[BornAgain]

Bonds are "Financial Instruments". You "buy" them. At some point you liquidate (Sell) them. The interest would be "income". But if you sell the bonds, the proceeds from the sale are not income for purposes of BK.

As for SOFA number 11; the sale of a bond is not a closing of a financial account.

Actually... SOFA number 11 states in its instructions, "List all financial accounts and instruments held in the name of the debtor... which were closed, sold... within one year... [emphasis mine]

So my take is that redeemed EE Savings Bonds get listed there in question 11.

What's your reading of that?

Thanks.

[EricaCallaha]

You do have to list them. We had to.

Good luck.