Only passed means test by $150.00

[123ABC]

I just filed yesterday and it seems I only qualified for ch7 by $150!!! Thank goodness I didnt work more overtime. Is this a problem? Can the courts force me to do a ch13 or if I pass I pass???

Thanks.

[hamburgervol]

$150 isn't a lot of money. I think you'll be okay. However, you might want to find some additional expenses. Term life insurance policies are something you might want to consider. The added expense will help.

Don't forget all your medical/health needs...Band Aids, Tylenol, dental floss, tooth brushes, etc..etc..

[2manybills]

They also look on your schedule J. Make sure you are showing less than $164left over at the end of the month.

[123ABC]

Oh thats good to know! I show about 300 negative every month!

[Amy26]

They also look on your schedule J. Make sure you are showing less than $164left over at the end of the month.

Anybody ever wonder why its a 164 dollars? Its such an arbitrary number... luckily I came in at 162.... boooya! ;)

[debtmonster]

For the life of me, I don't know why you guys don't start home businesses and simply just throttle your incomes down to be negative. It's not difficult and completely legal to do. Unless you're like $2,000 over the median, all you have to do is start a home business of any kind and start spending all of that extra money to promote the business and WHA-LAH! You're under the median. I beg of you, avoid a Ch. 13 at all costs!!

Google some MLM companies and join one. Then start throwing money into it until you are discharged. Then you can either quit and keep promoting it. As long as you're filing a Schedule C and write everything off, your gross income can drop down DRAMATICALLY! If you're at $60k and your median income is $53,000, then start $7,000 per year on the MLM to promote it.

[Amy26]

If we don't have money to pay our bills (based on our current incomes) how exactly are we supposed to start a company and put money we don't have into it?

[debtmonster]

If we don't have money to pay our bills (based on our current incomes) how exactly are we supposed to start a company and put money we don't have into it?

Then if you can't pay your bills, how are you over the median?

[Amy26]

Right...cause everyone over the median shouldn't have to file cause they can pay their bills. And if you continue with that mindset...why would you tell everyone to start a business to get under the median to file if they should be fine just because they are over the median?

[justbroke]

I just filed yesterday and it seems I only qualified for ch7 by $150!!! Thank goodness I didnt work more overtime. Is this a problem? Can the courts force me to do a ch13 or if I pass I pass???

Are you over or under the median income? If you are over-the-median, Did your lawyer check the "Presumption of Abuse Arises" box on your Form B22A (Means Test)?

If you are actually over the $109.58 ($6,575/60 months) and less than $187.50 ($10,000/60 months), then your case is presumed to be abusive. You can rebut the presumption if your disposable income is less than 25% of your (scheduled) unsecured debt, or by demonstrating special circumstances.

This is very important, because you could still get a 707(b) Motion to Dismiss because the U.S. Trustee still thinks your case is abusive.

Anybody ever wonder why its a 164 dollars? Its such an arbitrary number... luckily I came in at 162.... boooya! ;)

It's $10,950 divided by 60 months. Congress felt, when this was passed, that being able to pay $10K over 60 months, was a good indication that you could provide a meaningful dividend to your creditors.

I will keep re-iterating to folks that being over/under the median income, is the least of your problems in trying to get a discharge under Chapter 7. Your "allowed" expenses are always going to be the single most important factor. Second will be what your actual disposable monthly income is calculated as (Schedule J and/or Form B22A).

[debtmonster]

Right...cause everyone over the median shouldn't have to file cause they can pay their bills. And if you continue with that mindset...why would you tell everyone to start a business to get under the median to file if they should be fine just because they are over the median?

It worked for me. I got my income down from over $55,000 down to about $33,000 putting me WAY UNDER the median for my state.

If you're way over the median for your state, then you have to be doing pretty good. Even if you're not, that's not the way you're being perceived. So you need to change that perception and show on your tax forms that you didn't make crap the previous year. The easiest and legal way to do that is to start a home business. Join Neways, Amway, Amsoil, Herbalife, Avon, Tupperware, Shaklee, or any good MLM you can think of. Now all of a sudden those miles you were putting on your car, your phones, dinners out and many other things you were doing which were not tax-deductible now all of a sudden become a TAX DEDUCTION! That right there throttles your income down.

You are spending the money already. Now you're able to convert that existing phone bill, cell phone bill, water bill, home owner's association fee, electric bill, etc. into an all or partial tax write-off. If you're working 100% W2, you can't do this. If you join Avon and start using your home phone for business as you promote the business, that phone line can be a tax write-off. If you take your friends out to dinner or buy a pizza and you talk about Avon, that's now a tax write-off.

I just got off the phone with somebody tonight who filed a Chapter 13 and they said they are ever so sorry they did so. They told me it is haunting them big time and that they are being turned down for car loans and credit cards because they are stuck paying back a portion of their debts.

I would highly recommend not doing a Chapter 13 if you can do anything at all possible. Chapter 7 is the way to go. A 7 is a walk in the park compared to a 13. Just make sure you get nothing or almost nothing. Since we're including our house in the bankruptcy, that increased our exemptions for a married couple that was only $2,000 to now over $10,000. So in our Chapter 7 we get to keep up to $10,000 worth of stuff! That's pretty much all of the belongings in our house since none of it is secured. Only the house and cars go back. Everything else can go to an apartment or a house rental.

Chapter 7 rocks!!
It's a life saver!

Good luck on whatever you decide to do.

[joh]

Be careful about advise from the internet. A high post count does not mean a lot
of knowlege.

[debtmonster]

Be careful about advise from the internet. A high post count does not mean a lot
of knowlege.

That was a lot of knowledge. For each person that could do what I did would save them YEARS of headaches. If you're a masochist and have that pain fetish, then by all means, do whatever you can to file a Chapter 13.

I don't like suffering. So I did what I could to get into a 7. If I would have filed early last year, I could have been pushed into a 13. You do have some control when it comes to going bankrupt. Bankruptcy can require some planning.

Doing what I suggested is 100% legal. There is absolutely nothing wrong with having your own home business. Millions of people do it all the time. An MLM is one of the easist and most legit. Just be sure to file a Schedule C to get the write-off's. You can use a CPA, Turbo Tax or Tax Cut software to help you file.

[lrprn]

Doing what I suggested is 100% legal. There is absolutely nothing wrong with having your own home business.

True and true. However, explaining to a more-stringent local trustee or the US trustee why you suddenly decided to open a home-based business close to filing that just happened to drive your overall disposable income down under $162/month so you could file Ch 7....that could be quite a tap dance if you don't have all the necessary documentation to back everything you did up.

Keep in mind that just because you see Ch 13 as a death sentence does not mean everyone does. Many filers aren't close enough to the median in their state to use opening a sham home business to deliberately deceive the court (legal or not) to get below the median and show no disposable income when they file.

One last personal observation - bragging about what you did here and encouraging others to do something dishonest (but legal) before filing on purpose just for personal gain and convenience....well, obviously you're sleeping at night and feeling quite smug about getting away with what you did to boot. Doesn't mean everyone else here will.

Bottom line - this forum does not support and does not recommend what you are proposing.

[debtmonster]

Having your own business is not a "sham" whatsoever. Everyone in this country is entitled to it. If a person is that worried about it, then they should hold off filing. (That's called "planning".) That's what I did. I could have filed last year, but then my income was too high for the 6 months that were included. So I delayed my filing. No trustee is going to object to legitimate business expenses. You are 100% entitled to do what you see fit to promote a business. If it's going to improve your future, you can do it. That doesn't guarantee that you're going to make money, but how is any business owner supposed to do that? Investing in ANY business is a gamble. The thing is, you can't go to a casino and say you blew the money and get a tax write-off. The UST will throw your case out faster than $hit through a goose.

If what I am doing is totally wrong, then in 90 days, my case won't be discharged. That means what you're saying is right. However, if I succeed on what I am telling you and recommending others to do, then you are wrong.

To work W2 your whole life is to be nothing more than sheep. You have to think outside the box. Look what got many people here in the mess they are in. Working for someone else and then somebody else's decision put them on the street in a blink of an eye. NO THANKS! Work for yourself and then YOU call the shots, not a boss, manager, employer or whatever that one person is who signs your paycheck who can cut you loose on a moment's notice. I don't know about you, but I am sick and tired of having somebody else control my financial destiny. Going to college doesn't guarantee you'll make big bucks neither. Just look at all of the unemployed college grads who are stuck with school loans working at fast food restaurants to make the minimum payments on their loans.

Bottom line: There's nothing wrong with trying to start a business on the side. So please don't knock it. Where would Bill Gates or Steve Jobs be today if they decide to become employees back in the day instead of employers?

All the best,

DM