Presumption of Abuse...

[eddiep]

if you are under median can the UST declare presumption of abuse or is it an automatic chapter 7?

[JRScott]

eddie if you are below median and have less than 100k in debt being discharged it is highly unlikely the UST would be even involved.

It depends on a lot of circumstances though. If your case was one of the audited cases and it revealed some irregularities then he could well object to something, but in most cases under median gets less review than high debt cases/over median cases.

[Help!]

If income is below median, the presumption of abuse does not arise. However, a case can still be dismissed for abuse under 707(b).

[Help!]

eddie if you are below median and have less than 100k in debt being discharged it is highly unlikely the UST would be even involved.

It depends on a lot of circumstances though. If your case was one of the audited cases and it revealed some irregularities then he could well object to something, but in most cases under median gets less review than high debt cases/over median cases.

And I agree - very unlikely that the UST would be looking deeply into a below median case unless there was an adversary proceeding or the panel trustee forwarded it. I have not run across any UST audits of below median cases.

[eddiep]

we have over $150k in unsecured debt (I know!) Scarey thing is that below median because hubby was out of work for 3 of the last 6 months, but could afford chapter 13 now. What do you think?

[Help!]

It really depends on how your case looks as a whole, especially schedules I and J. If there's enough income to support repayment (e.g., a net income of > about $200/mo. on J) you'll likely encounter challenges to a Ch. 7 even though you have the 707(b) exclusion on the means test because of the unemployment period.

[eddiep]

we are expecting a personal injury settlement of $40k soon. We expect to give this up to the trustee. Will this play into whether or not they will try for a chapter 13? My lawyer is SOO confident that we will be chapter 7. Sometimes his confidence calms me sometimes it scares me.

[Help!]

The trustee's job is to maximize repayment to creditors, so unless your net monthly income on schedule J would provide a 5 yr. repayment of >$40K, I can see why your attorney is confident. Since you're also below median, it's unlikely the UST would be involved and the panel trustee will likely be the decision maker.

If the settlement falls through and there are no assets for the trustee to liquidate, that would be a different story.

[eddiep]

our lawyer says he can exempt $10k of our settlement in addition to all our other assets. we are allowed 18k in total exemptions, so that 10k would put us way over the 18k. I don't understand this, is there something I am missing? Does it have something to do with how much we would repay in 5 years?

[Help!]

You can only exempt what you can exempt, so unless there's a wild card exemption in addition to the $18K I don't understand how your lawyer can prevent the entire settlement from being liquidated. He may be partially exempting assets, leaving a little equity here and there and hoping the trustee won't bother with them. Did he mention you make payments to the trustee on some of the assets to keep them?

I am very skeptical about BK lawyers who tell their clients everything's going to be okay after my experience. I wish I would have had the presence of mind to question what our lawyer was doing prior to filing. There definitely are no guarantees, but there are some good lawyers out there who have a working relationship with the trustees and have a feel for how things will go. Hope this is the case with yours.

[eddiep]

I hope he is not an idiot! I do have to say that I feel prepared, educated and confident from all the info I have gotten here and are prepared to hand over any assets they want, no regrets, I mean we are getting rid of alot of debt. During our pre bankruptcy certification session with CCCS the counselor told us that the bk process is pretty painless in our area. He told us a story about a couple that had just had their 341. He said the trustee walked into the room said hello, looked at his watch and signed the paperwork, said you are all set and gave them some information and instruction and got up an left. He said that is pretty typical in our court. I hope so!!!

He never said anything about making payments on anything. He said that is his job, to fight to keep all of our assets. This was during our initial meeting and we were doing just rough, off the top of our head, estimates on our assets. Will we be given the opportunity to keep the assets we want? Like we have a boat and dirtbike that we can't sell and would rather keep cash from the settlement and surrender them?

[Help!]

That's exactly the right outlook - not being too attached to the assets with the goal of getting out from under a huge amount of debt. You may be able to buy back the non-exempt portion of an asset depending on what your attorney is able to work out, but don't count on it.

[eddiep]

What I meant is, can our lawyer exempt cash from the settlement but not the boat or dirtbike if we are over on exemptions, and essentially force the trustee to take the boat and dirtbike and we keep cash? We want to sell them anyhow but nobody is buying stuff like that right now.

[TXFowlerfan]

JR...if the UST challenges expenses, it's usually only if you claim more than the standard IRS expenses for food, clothing, enery costs, etc...right? Not usually for fixed expenses like car loans or mortgages?

[JRScott]

JR...if the UST challenges expenses, it's usually only if you claim more than the standard IRS expenses for food, clothing, enery costs, etc...right? Not usually for fixed expenses like car loans or mortgages?

Correct


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