Has anyone ever had a 7 converted to a 13...

[wantout]

While being allmost $7000 under the means test?

My state has its own deductions, and using those I come up well under the means for my state. Now I seldom spend my money like the state allows, meaning I may or may not spend what they allow for food etc....

Would that create a situation where the TT might want to convert to a 13?

[lrprn]

While being allmost $7000 under the means test?

My state has its own deductions, and using those I come up well under the means for my state. Now I seldom spend my money like the state allows, meaning I may or may not spend what they allow for food etc....

Would that create a situation where the TT might want to convert to a 13?

Everything hinges on if you show sufficient disposable income on the required Means Test and Schedules to support a Ch 13 plan or not.

Keep in mind that some Means Test lines must use mandated IRS figures rather than your own actual expenses - those go on the Schedules. Also an experienced lawyer knows how much "fudge" room you may have on the Means Test and Schedules and will be famliar with local court case decisions and customs as well.

If your completed Means Test and Schedules show more than $180/month disposable income, then your trustee can ask the court to move you into a Ch 13. It takes a very unusual set of circumstances for a below-median filer to have enough disposable income to support a Ch 13 plan.

If you show less than $100/month disposable income (and this will likely be the case), then you can't support a Ch 13 plan and it's Ch 7 for you.

[wantout]

Eh I am worrying over nothing I am sure...

[killinstinct]

I show $64 in disposable income on my schedules, and were 'just' under median. My lawyer is confident and tells us not to worry about it....

[HakunaMatata]

I show $79 DMI on the Means Test (I'm under the median by approximately $300) and I'm coming up with $400 DMI on Schedule J. The vast majority of my expenses are significantly less than standards (or do not exist...no home phone, no cable). My lawyer initially expressed great confidence in my C7 position. I'm quite curious how he will react when he sees Schedule J. Secured payments and utility payments don't lie. I took out an extended auto loan (72 months as a potential monthly buffer maintaining intentions of prepaying), I claim high on my income taxes (I don't enjoy loaning the government my money), and my mortgage recently reduced by $100/month for the next year. Who knows...I may be one of those odd under-the-median C13 cases!

[killinstinct]

I show $79 DMI on the Means Test (I'm under the median by approximately $300) and I'm coming up with $400 DMI on Schedule J. The vast majority of my expenses are significantly less than standards (or do not exist...no home phone, no cable). My lawyer initially expressed great confidence in my C7 position. I'm quite curious how he will react when he sees Schedule J. Secured payments and utility payments don't lie. I took out an extended auto loan (72 months as a potential monthly buffer maintaining intentions of prepaying), I claim high on my income taxes (I don't enjoy loaning the government my money), and my mortgage recently reduced by $100/month for the next year. Who knows...I may be one of those odd under-the-median C13 cases!

Your lawyer will know best, but I keep reading here that you need to stay under $150 or so a month DMI to be under the radar. Doesn't sound like you've filed yet...do you need another new car for your family? Dental work? Medical work? Sounds like you have a house, I'm sure there is some kind of maintenance that needs to be done, water heater, roof, etc. It doesn't sound like you do yourself any favors by being under the IRS standards as the TT will see that as $$$ for the taking...

I'm not saying to lie or anything, but if you're like me, you're overly optimistic about your budget and you're not accounting for a lot of things that you are allowed to, maintenance, groceries and clothing were big ones for me. And you are allowed to set aside a certain amount of money for entertainment. You may want to get a home phone (this is necessary for emergencies, cell can be unreliable, etc.). You're allowed to have cable, and I would argue internet for job, education, etc. I'm just SURE you're not including some expenses...

[whipster1]

Use the IRS standards. I have never seen a case by the UST that challenged the standards. Maybe someone here can chime in and set me straight but those standards were adopted by the UST's office for the specific purpose of using them and not having people have to prove every normal monthly expense.

[HakunaMatata]

Your lawyer will know best, but I keep reading here that you need to stay under $150 or so a month DMI to be under the radar. Doesn't sound like you've filed yet...do you need another new car for your family? Dental work? Medical work? Sounds like you have a house, I'm sure there is some kind of maintenance that needs to be done, water heater, roof, etc. It doesn't sound like you do yourself any favors by being under the IRS standards as the TT will see that as $$$ for the taking...

I'm not saying to lie or anything, but if you're like me, you're overly optimistic about your budget and you're not accounting for a lot of things that you are allowed to, maintenance, groceries and clothing were big ones for me. And you are allowed to set aside a certain amount of money for entertainment. You may want to get a home phone (this is necessary for emergencies, cell can be unreliable, etc.). You're allowed to have cable, and I would argue internet for job, education, etc. I'm just SURE you're not including some expenses...

Thanks for your suggestions! I really appreciate your insight!

I won't be surprised if my attorney attempts to shed new light on this financial picture. I simply don't want to be dishonest. I'm single without dependents and had I planned BK, I could have made different decisions. Four hundred dollars really doesn't spread very far. I could have taken out a shorter term auto loan to increase monthly payments or...better yet...purchased the car I wanted instead of making a seemingly more practical (and utterly disappointing) selection. I could have a home phone and cable television (I do have a cable modem which is reflected on Schedule J). I could have made more medical appointments. I could have/should have changed my income deductions (I'm close to claiming too much and owing). I haven't done these things because I've been trying to propel myself out of debt. I imagine if I were to suddenly make changes, they may be perceived as red flags. An accepted standard car payment alone reduces my DMI to $136. Throw cable and a home phone into the mix...I'm one insolvent C7 chica!

I don't intend to keep my house. In fact, this is the driving force for BK. Ironically, the items you mentioned (roof and water heater) need some love (along with my main sewer line and main support beam). Investing in a future foreclosure seems a bit suspicious to me (plus, I lack the means to do so). On the flipside, it will cost me more to become a renter. Despite the problems with my house, I'd like to live "rent-free" and save during the foreclosure process. I imagine the only way to demonstrate an upcoming increased cost would be to secure a lease?

Am I being too paranoid thinking if I suddenly lived like a "normal" person, I'd surround myself in red flags?

Also, do Trustees scrutinize past payment behavior (and potentially compare this to DMI)? For months, I was able to pay $400-500/month to credit cards. My income hasn't changed; although, I've had a few big financial hits recently...need for a car, major dog expenses (I was shocked to discover my dogs cost nearly $250/month this past year!), and an overactive sewer which has placed a plumber in my budget (I wonder if he'll be proud to know he has an active role on my Schedule J?! ).

[killinstinct]

Hakuna Matata:

You are being paranoid, in my opinion. I would live normally. You're not expected to be suffering. The IRS standards are supposed to indicate what 'normal' is.

I would definitely change your witholding to at least break even. Again, you're not helping yourself here. The less DMI the better. It's not cheating, it's just being financially responsible. Get a home phone, etc. STOP CHEATING YOURSELF!!! Go to the doctor if you need to. Take care of your animals. I can't possibly imagine a TT giving you any sort of crap for this. Make sure you're buying enough groceries and the right kind. You're not expected to eat top ramen. If your schedule now shows negative DMI, great.

Bottom line is, though, at least according to my attorney/district, if you are under median your case flies through without any problem. I'm sure your attorney will tell you where you're at. You have to trust them.

Take care of yourself....please!!

[killinstinct]

Whipster is absolutely right from what I understand.

[pookieny]

I think being a little paranoid is a good thing! I've had things bite me on the ass that I never gave a thought to. So now I make it a practice to worry a little about practically every thing..lol

[killinstinct]

It's ok to be a little paranoid! I agree, but don't screw yourself!!

[leena]

Expenses

I just did my final meeting with the attorney, my BK was filed today. My expenses as they listed them looked a whole lot different from what I had written down. Some things were exactly the same, like rent and household goods. Utilities were increased and food was a BIG $350.00 for just me (the IRS standard is 285, but she said their figure included work lunches, for example) - I am filing a 7. My car expenses were also a lot more.

When I question if any of it was going to raise the trustees eyebrows, she said not at all, it was standard stuff. She also said these figures are suppose to be based on annual averages and not just what you spent the two or three months prior to filing.

This firm files lots of cases every year, they have four offices in my area, so I trust what she is telling me. A good attorney can find plenty of normal living expenses for you, have no fear. Many of us in bankruptcy are pretty bad at figuring out what we actually spend or need to spend, anyway. The attorney can think in the long term for you. Sure, maybe your car has had no repairs in the past 11 months, but if you spend 1400 in repairs today, that still adds up to over 100 a month in repairs alone, before you get to gas or tabs or insurance.

It will be fine!

[HakunaMatata]

Hakuna Matata:

You are being paranoid, in my opinion. I would live normally. You're not expected to be suffering. The IRS standards are supposed to indicate what 'normal' is.

I would definitely change your witholding to at least break even. Again, you're not helping yourself here. The less DMI the better. It's not cheating, it's just being financially responsible. Get a home phone, etc. STOP CHEATING YOURSELF!!! Go to the doctor if you need to. Take care of your animals. I can't possibly imagine a TT giving you any sort of crap for this. Make sure you're buying enough groceries and the right kind. You're not expected to eat top ramen. If your schedule now shows negative DMI, great.

Bottom line is, though, at least according to my attorney/district, if you are under median your case flies through without any problem. I'm sure your attorney will tell you where you're at. You have to trust them.

Take care of yourself....please!!

Aww...thanks!

I've made decisions some would argue are sacrifices. I developed a master get-out-of-debt plan and my money pit house disrupted it. Despite my current BK direction, I'm struggling with unraveling my mindset. I've developed "rational" reasons for many of my choices...I don't need a home phone or cable or much food because the vast majority of my life is spent at work or passed out because of work (which happens to be an utterly frustrating aspect of my life). I don't need regular haircuts because I've donated my hair twice in two years. I don't need to turn up my heat because I have the finest of fleece (*insert cheesy Old Navy commercial*). I don't know if I've been living correctly or if I've been making excuses for my money-saving mentality. Regardless, my combined actions clearly haven't benefited me in my projected manner. I'm definitely seeing the world a bit differently since I stopped paying my mortgage. While I still don't feel I'm properly compensated for selling my life to work, I actually have some money!

I'm looking forward to reviewing my expenses with my attorney. I just don't understand how hard numbers (mortgage, auto loan, and utilities) can be increased to standards. In my case, the difference is approximately $500.

And, for the record...I may be "abnormal"; although, I've never purchased Ramen! This places me somewhere on the normal scale, correct?!

[killinstinct]

Good luck, and yes, that's good you don't eat crap at least!