Above median income

[sal425]

For the last six months I am 2k over the median income for a family of five. After completing the means test I have a negative monthly cash flow of about -$300. The problem is, the allowable rent/mortgage for a family of 5 in my county is only $1395 which is ridiculous. My current mortgage is $2700.
Is this type of inconsistency impossible to overcome for chapter 7?

[TBLTZ]

For the last six months I am 2k over the median income for a family of five. After completing the means test I have a negative monthly cash flow of about -$300. The problem is, the allowable rent/mortgage for a family of 5 in my county is only $1395 which is ridiculous. My current mortgage is $2700.
Is this type of inconsistency impossible to overcome for chapter 7?

I believe you can included your mortgage in the chap7 for 2700 which will help you on the means test. Someone might want to chime in though.

[fyi2]

yes in the means test
do you plan to keep it?

if you are keeping then you can in schedule J as well, but not if you are surrendering

[justbroke]

... The problem is, the allowable rent/mortgage for a family of 5 in my county is only $1395 which is ridiculous. My current mortgage is $2700.

Is this type of inconsistency impossible to overcome for chapter 7?

Doesn't matter what your county "mortgage/rent" allowance is. If you own a residence, you get to use that amount. If the Trustee complains, tell him well, Congress made it so.

[sal425]

Thanks for the responses.
After submitting all of the numbers to a potential lawyer, she did not think I would qualify for a 7 because my expenses were above the allowable. I do plan on keeping my house. If the trustee only looks at actual expenses, why do they provide charts showing the allowable expenses? I am confused.

Would love to find a competent lawyer in MA.

[justbroke]

Thanks for the responses.
After submitting all of the numbers to a potential lawyer, she did not think I would qualify for a 7 because my expenses were above the allowable. I do plan on keeping my house. If the trustee only looks at actual expenses, why do they provide charts showing the allowable expenses?

When you are over-the-median, the allowable expenses are what is used as a guideline for both an upper-number and allowance in that category. These numbers come from the IRS and the IRS uses these numbers to compute how much you can afford to pay them back. The "allowances" are used to put everyone on equal footing based on where they live. Takes the "subjective" nature out of the calculation of the means test because everyone basically uses the same numbers.

So, when your expenses are about the IRS limits, you need really good "special circumstances" to justify them being over that. There are some, such as home energy, where it's just a matter of documentation. In other areas of expenses, they are pretty firm limits, like the food and clothing allowance. A "special circumstance" could be medical needs including the debtor's special medical needs or a child's special needs.

[StartingOver08]

Sal, it sounds like you need to find another lawyer.

Some of the attorney's just do the 'easy BK's' and do not want to mess with anyone over median (unless they file a 13). Liz on here had to interview 7 attorney's (I think it was 7!) before she found one to file her as a 7. I was substantially over median and filed a Ch 7 - because I had the documentation to prove my expenses. (2000 pages of documentation BTW).

Don't lose hope. The interview process is critical.

[laurannm]

I agree with Startingover....set up some consults with a few more lawyers. We interviewed several ourselves and because we were above the median, most of them automatically said we would be Ch 13 without running a means test or any schedules.

Our lawyer actually ran a means test for us as part of the free consult

[sal425]

Thank you JustBroke and Starting Over-
Would a situation like this not be something I could do myself pro se?
Basically the only expenses I am above the allowable are housing and utilities. If the trustee allows me to stay in my home it should be easy. I have called many lawyers and I have only had 2 call me back for appt's. You are right about the easy BK's, they are just too busy right now to take a tough case.

[OhioFiler]

Your case doesn't sound all that tough to me. Even including your $2,000 overage which is $333 per month you only have $33 per month to pay unsecured creditors. It shouldn't be difficult to prove your housing and utilities are reasonable.

I would not recommend filing pro se to anyone but I brelieve you should easily find an attorney happy to file a C7 for you.

Good luck.