How likely is it....

[berrymom35]

Our atty has lead us to believe that as long as we are under the median income that our chapter 7 will push through with no problems. But on this board I read that even if your under the median we can still be pushed into a 13 if we have disposable income enough to pay our creditors 25 percent of what we owe them over the course of a three year chapter 13.

I've ran the means test calculators on line and none of them account for our homeowners insurance, personal property taxes, real estate taxes (our house payment does not include these) and fees for our kid's activities...such as dance, baseball and karate, all of which our atty said we could include.

We file next tuesday and now I'm very confused as to how it's going to go...like I said, our atty said it's an open and shut case...but I guess I'm just waiting for something bad to happen

[DustinLH00]

I had the same confusion on here as well when I started posting. Everybody kept shooting out different answers.

If you are under the median, you can file a Ch 7. If you are over, you must take the means test. If you pass the means test you can file a Ch 7. If you fail the means test you must file a Ch 13.

If you file a Ch 7, wheter you are over and passed the means test or under and didn't take the means test, you still have to list your income (sched I) and Expenses (sched J).

On the Sched J, you will be able to list insurance, taxes, entertainment, and the list goes on and on.

You must show low to negative disposable income (gross minus expenses) on the Sched J. If you are over $100 in disposable income (from what I understand) you are subject to a Presumption of Abuse issue. Then you will most likely be converted to a Ch 13.

If you are below that, preferrably negative, you should be safe to stay in a Ch 7.

I hope this helps.

Our atty has lead us to believe that as long as we are under the median income that our chapter 7 will push through with no problems. But on this board I read that even if your under the median we can still be pushed into a 13 if we have disposable income enough to pay our creditors 25 percent of what we owe them over the course of a three year chapter 13.

I've ran the means test calculators on line and none of them account for our homeowners insurance, personal property taxes, real estate taxes (our house payment does not include these) and fees for our kid's activities...such as dance, baseball and karate, all of which our atty said we could include.

We file next tuesday and now I'm very confused as to how it's going to go...like I said, our atty said it's an open and shut case...but I guess I'm just waiting for something bad to happen

[justbroke]

Our atty has lead us to believe that as long as we are under the median income that our chapter 7 will push through with no problems. But on this board I read that even if your under the median we can still be pushed into a 13 if we have disposable income enough to pay our creditors 25 percent of what we owe them over the course of a three year chapter 13.

I see that you have a good summary already.

I will add that being under the median income, certainly keeps you off the U.S. Trustee's radar in a Chapter 7. However, what's on your Schedule I and J can impact this! It can also be impacted by payments that you will not incur in the future. For example, if you surrender your home... and even though you are under the median.... you may have enough disposable income to fund a Chapter 13.

This is why we say that being under-the-median is not a guarantee to getting a Chapter 7 discharge. However, the odds are in your favor that you will pass through unscathed. Also, your unsecured debt load may be a factor in getting more scrutiny. If you have $100K of unsecured debt that is being discharged... the UST will certainly be "interested" in your case. That, again, is not to say that it will be dismissed, but it does bring more scrutiny.

The more negative your disposable income is (on the Means Test if you're required to take that and/or your Schedule J expenses subtracted from your Schedule I income)... the better!

Listen to your attorney. If your attorney says that you have no issues, then you have no issues. Sometimes a little knowledge can be bad. We don't want you up all night worrying... that's what you paid your lawyer for.

[Amy26]

I'm also a bit nervous about this. I'm over 30k below the median but on my expenses I have 160 dollars left over. My attorney said not to worry about it and if they say something he'll say he forgot an expense or something... should I be worried?

[OregonMom]

Just listen to your attonery. I did and mine went fine. Family of 4, under the income limit for a chap 7 and attorney said it would go through just fine and it did. You could easily put that $160 into gas and food, my gas bill went up $100 last month alone due to the increase at the pump and two growing boys make my food bill around $800 for a family of 4 every month and we don't eat out more than 3 times a month.

[justbroke]

I'm also a bit nervous about this. I'm over 30k below the median but on my expenses I have 160 dollars left over. My attorney said not to worry about it and if they say something he'll say he forgot an expense or something... should I be worried?

Probably not. Again, your attorney knows the landscape, the local Trustees and a lot more about your expenses and petition that I will ever know.

Trust your attorney. If something comes up, as he says he will, he will reduce that "disposable income". Technically, that disposable amount can't be over $168.00 (or something around there).

I wonder, is the "Presumption of Abuse" box checked on your Form B22A?

[Amy26]

No, I got a letter in the mail after I filed and it said there was no presumption of abuse. My left over income was exactly 162.

[banca rotta]

I'm also a bit nervous about this. I'm over 30k below the median but on my expenses I have 160 dollars left over. My attorney said not to worry about it and if they say something he'll say he forgot an expense or something... should I be worried?

As others here responded to "listen to your attorney" since he knows the system in your area maybe ok, but not for me. Some here have also listened to their attorney and found out just how wrong they were.

I know the courts generally don't like the old "by the way I forgot to mention this".

I would soak up every last dollar of disposable income before filing but that's just me.

I guess it depends on the players in your region.

Good luck

[banca rotta]

Sorry I did it again. I gave pre-filing advice but noticed you already filed. I did that last week too.

Anyway good luck...

[banca rotta]

No, I got a letter in the mail after I filed and it said there was no presumption of abuse. My left over income was exactly 162.

This will be determined about 2 weeks after the 341.

If PACER's flag remains "meansno" then you can be closer to the happy dance. Too early now.

[Amy26]

Hehe thanks Banca... I hope he's a good attorney...he was expensive as hell... lol.

The pacer for my district is not like the ones that you guys talk about... I don't see anything that says meansno... it just has a thing at the top that says "asset case?" and it says no.

[justbroke]

No, I got a letter in the mail after I filed and it said there was no presumption of abuse. My left over income was exactly 162.

Well, I wish you a great outcome at your 341 Meeting. You should know at or within 10 days after your 341 Meeting if there's a presumption of abuse When you are over $108/month, there is a presumption. I think you'll do just fine though with your expensive attorney.

[pcn]

Hehe thanks Banca... I hope he's a good attorney...he was expensive as hell... lol.

The pacer for my district is not like the ones that you guys talk about... I don't see anything that says meansno... it just has a thing at the top that says "asset case?" and it says no.

We're leaning (this week) towards the ch7. Would I be too nosey to ask how much is "expensive as...". A ch13 is 25-2900 here, and a ch 7 is approx $1300 (from the lawyer where we started looking at a ch13). He liked the 13 better (wonder why...) but running the means test we can go the 7, I believe. Thanks!

[Amy26]

My lawyer charged 2500 for chapter 7 and 3800 for a 13.

[pcn]

Wheee! Thanks for sharing. Guess I need to thankful to live in the south, don't I?