Headed towards a presumed abuse?

[JoeW]

Hi everyone!

I just filed for Chapter 7 in pro per, on 6/15/09. My income is well below the median for my state/household size, so I thought that I automatically qualified for chapter 7 since I didn't have to take the means test. I am the sole earner with a stay-at-home wife and a 5-month old son.

Bearing this in mind, I slightly underestimated some of my monthly expenses to make my schedule J seem more "reasonable" (I have no lawyer, I thought, so I'll attract less scrutiny if it seems more believable). This left me with $282 reported as disposable income (the Nolo book showed a guy with $400, so $282 is pretty low right?). I actually have closer to $100 or so.

Now I found out that I can still be forced into Chapter 13, especially since 60x$282 is much more than 25% of my unsecured debt ($43,000 and change). My 341 is on July 7th. I'm really nervous now. Should I file amendments to my schedules? What do I do?

[justbroke]

Bearing this in mind, I slightly underestimated some of my monthly expenses to make my schedule J seem more "reasonable" (I have no lawyer, I thought, so I'll attract less scrutiny if it seems more believable). This left me with $282 reported as disposable income (the Nolo book showed a guy with $400, so $282 is pretty low right?). I actually have closer to $100 or so.

Hmmm... always put your "actual" expenses on Schedule J. The amounts must also be demonstrable (through documentation) and actual. While I don't suspect you'll get any gripe for putting lower amounts, changing them after, may irritate the Trustee... thinking that now you're just inflating them to avoid the presumption of abuse. At this point, it is what it is... so don't fret.

Now I found out that I can still be forced into Chapter 13, especially since 60x$282 is much more than 25% of my unsecured debt ($43,000 and change). My 341 is on July 7th. I'm really nervous now. Should I file amendments to my schedules? What do I do?

Wait to see if the UST or Standing Trustee files a 707(b) "presumption of abuse" notice. If they do, then update the Schedule J. Otherwise, sit back and relax for now.

Since you are not required to take the means test, I don't think you "technically" need to worry about that "means test" calculation for determining abuse. However, you just never know what a Trustee will decide to do with they see that much positive disposable income on Schedule J.

[JoeW]

Thank you so much for that reply! I am just wondering, when the Trustee looks at me and asks me "Is everything true?" if I should mention it to him. I can show that my food expenses are at least $150/month more that I wrote down (I honestly didn't think I lowballed by that margin until I really analyzed what we spend on it today with my wife... baby formula adds up!)

[justbroke]

Thank you so much for that reply! I am just wondering, when the Trustee looks at me and asks me "Is everything true?" if I should mention it to him. I can show that my food expenses are at least $150/month more that I wrote down (I honestly didn't think I lowballed by that margin until I really analyzed what we spend on it today with my wife... baby formula adds up!)

The Trustee will ask you if anything changed on your schedules. You can answer "yes". (Don't say anything else, unless and until asked.) Bring documentation with you to the 341 Meeting and be prepared to hand over copies. The Trustee may ask you to amend Schedule I/J. That will cost you $26 to file the amendments.

[JoeW]

Thanks again! In fact, my wife just mentioned something that I had not considered: She is entering a debt management/payback plan through a credit counselor to pay down her debt (I am filing individually so we can preserve her good credit somewhat), and that will leave us with approx $25 a month in disposable income. I can furnish that plan to the trustee as evidence if it comes to that, I would think.

[whipster1]

Schedule J should be zero disposable or close to it for a seven. You can amend your schedules at any time. Use the IRS allowable expenses for food etc, or if your expenses are higher then bring receipts.

http://www.usdoj.gov/ust/eo/bapcpa/20090315/bci_data/national_expense_standards.htm

You can claim 626/month food expense for a family of 3.

[JoeW]

Thank you both for your answers... I think that I will hold tight for right now and just address anything that happens as it does

[needtobe]

So if you don't have actual receipts you can use the standard expenses?

[justbroke]

So if you don't have actual receipts you can use the standard expenses?

Not when you're under the median!

[eddiep]

Not when you're under the median!

Not when you are under? Why is that?

[needtobe]

So you are saying if I am over the median I can use the standard exemption and not have the receipts.

[browneyes]

I THINK I read somewhere that if you are under the median, the chapter 13 would only go for 36 months but 60 if you are over the median.

If that is true, the figures are much closer for 25%.

Good luck.