Unemployment vs Means Test

[enginerd]

With my income alone, I come very close to qualifying for Chapter 7 based upon the means test. I'm over the median income by approx. $1200... putting in all my expenses gets me really close... if I don't include my wife's income...

My wife had been a stay-at-home mom for 7 years. She then landed a job at which she worked for about 8 months before getting laid off. She got 17 weeks unemployment which will expire in 2 weeks.

Since we just stopped paying credit cards (literally days past due) and probably have some time before filing, is it in our best interest to not pursue an extension to her unemployment and let it lapse. With her income (approx. $800 / month) we end up way over on the means test and could be forced into a chapter 13.

[needhelphere]

I was also on unemployment and had to wait to file for BK a few weeks before my UI ran out as my UI put our household income over on the means test. I was advised (by my lawyer) that I do not file for the extension until after the BK is over. Hope this helps.

[supercrash]

I am trying to file for 7 and my unemployment checks put me over, the extensions end in 8 months and I need to drop it sooner, I don't know what to do.

Same boat

[momisery]

The means test is stupid. We were paying 1081.00 for a rental house and renting it out of 890.00. We had to include the rent in our incomes. We paid for 2 years over 200.00 out of our pockets trying to do the right thing, trying to sell it, pay for it, and rent it out so we could make payments. I hope the 1081.00 payments counts for debt against our 890.00 rent. We stopped paying when hubby lost his job on the rental house. So we collected 3 months, and paid one month only. Needless to say since he had been laid of several times, and the auto industry dried up totally, we had little choice but to use that cash. I will admit we did spend it going out west as my Dad was having colon surgery for cancer. He is 90, and I did not want to not see him just in case. He did make it, so I guess that was the best news of the year for us! I am so afraid they will convert this to a 13 and we will be paying out then nose for attorney, court, and payments. And hubby's unemployment is going to run out shortly so we will not have his income at all. I guess I will bring that up.

[enginerd]

My wife's unemployment runs out in a week or two - she hasn't filed for an extension... We've never been thru this, so we're thinking that it's not an automatic thing. That you have to fill out some paperwork, re-apply over the phone, etc. Anyways, I hope her checks will stop coming... then we can file under 7.

[supercrash]

I live in Illinois, and it is automatic, you just get enrolled, no questions asked.

[albacore44]

wait a minute. I thought unemployment compensation was not included as income. You have to declare it as exempt under Social Security, or something like that. justbroke should know. mabee he waill chime in here

[justbroke]

The means test is stupid. We were paying 1081.00 for a rental house and renting it out of 890.00. We had to include the rent in our incomes.

Did you or are you using an attorney to file?

Because the $890 and the difference is accounted for, as you take the $1,081 cost in the Means Test as an expense. Being under-the-median (I'm sounding like a broken record) has no bearing on your qualification to receive a discharge under Chapter 7. It's your income less your expenses, producing a number known as your disposable income, is what matters.

[justbroke]

wait a minute. I thought unemployment compensation was not included as income. You have to declare it as exempt under Social Security, or something like that. justbroke should know. mabee he waill chime in here

There are arguments that Unemployment Income is not part of the Social Security Act or somesuch. There a camps that say it is income and camps that say it isn't. This seems to be District specific. (There's a recent Massachusetts ruling that says it is not income because it's part of the SSA.)

Your attorney can have you list it as a SSA benefit and then just wait for the Trustee to object to it. Then the Trustee would need to prove that it's not.

There are two cases which say that UI is an SSA benefit as defined in the Bankruptcy Code are In re Munger, 370 B.R. 21 (Bankr.D.Mass. 2007), and In re Sorrell, 359 B.R. 167 (Bankr.S.D.Ohio 2007).

Here's a case that determined that it is NOT an SSA benefit, In re Baden, 2008 WL 4905500 (Bkrtcy.M.D.Pa., Judge Thomas). That case actually cites the other two as wrong, and that they are the only cases finding that it is an SSA benefit.

[supercrash]

I am on my extension and they call it income and want to put me in a 5 year plan with my "income" ...that expires in a few months.

I am going to ditch my benifits with a 'fake' job in order to sneak in as a 7

Damn shame I have to game the system, but here we are, they claim it is stable income.

[justbroke]

I am on my extension and they call it income and want to put me in a 5 year plan with my "income" ...that expires in a few months.

WHO wants to put you in a 5-year plan? Your attorney? If this is an attorney... get a new one. A Chapter 7 is based on your disposable income, not what you make. If your disposable income is over $182.50/month or over $106.58 and more than 25% of your unsecured debt, yes, that's a Chapter 13. If you're on unemployment, I don't see how you don't pass the means test both on being under-the-median and/or having more expenses than income.

I am going to ditch my benifits with a 'fake' job in order to sneak in as a 7

Don't even think about providing false information to the U.S. Federal Court.

[supercrash]

WHO wants to put you in a 5-year plan? Your attorney? If this is an attorney... get a new one. A Chapter 7 is based on your disposable income, not what you make.

My 'income' gives us to much disposable income

Don't even think about providing false information to the U.S. Federal Court.

Thats how they want you ... frightened

The governments gets what they want with these tactics... War, bailouts, new bankruptcy bills that are now screwing me ..thanks George Bush you hack.

I would be hired by a company, my buddy has a shop, I would quit after a week because my car won't make the drive...cause it WON'T make the drive, a old Focus with a million miles, just about to go caput.

The job would be created for me so I could drop my benifits, there would be NO false info given.

[justbroke]

My 'income' gives us to much disposable income

Well, then you don't qualify for a discharge. I'm assuming when you say "us" you mean that the household income, which includes your unemployment insurance (UI), give you too much income. I thought you were talking about yourself and just your UI.

Thats how they want you ... frightened

I'm not frightened to go to jail. I don't want to go to jail. I also don't want to be known to perjure myself, or have a federal conviction. I pride myself in my integrity and it's required to hold the performance bonds that I have.

The governments gets what they want with these tactics... War, bailouts, new bankruptcy bills that are now screwing me ..thanks George Bush you hack.

A democratic congress passed this legislation.

The job would be created for me so I could drop my benifits, there would be NO false info given.

Sorry, but to me, that's manipulating the system, and I personally can't do it and can't condone it. The reason why the BAPCPA was created was to curtail bankruptcy abuse. You would still need to show prior wages based on the 6 month lookback. The lookback was created specifically to stop this practice, that you want to use. That's the underemployment "trick".

Why not just do some Bankruptcy Pre-Planning? Retain an attorney and start to work on legitimate things so that you can file at the appropriate time?

[hereforinfo]

My 'income' gives us to much disposable income



Thats how they want you ... frightened

The governments gets what they want with these tactics... War, bailouts, new bankruptcy bills that are now screwing me ..thanks George Bush you hack.

I would be hired by a company, my buddy has a shop, I would quit after a week because my car won't make the drive...cause it WON'T make the drive, a old Focus with a million miles, just about to go caput.

The job would be created for me so I could drop my benifits, there would be NO false info given.

Yeah, as if it's George Bush's fault you are in debt. He held you at gunpoint and forced you to use credit cards. What you are proposing to do doesn't even make sense. But go ahead and do it, just don't forget to bring your soap on a rope.

Also, are you not even trying to find a job? Why are you so sure you won't have any income to fund a 13?

[RGMLM]

With my income alone, I come very close to qualifying for Chapter 7 based upon the means test. I'm over the median income by approx. $1200... putting in all my expenses gets me really close... if I don't include my wife's income...

My wife had been a stay-at-home mom for 7 years. She then landed a job at which she worked for about 8 months before getting laid off. She got 17 weeks unemployment which will expire in 2 weeks.

Since we just stopped paying credit cards (literally days past due) and probably have some time before filing, is it in our best interest to not pursue an extension to her unemployment and let it lapse. With her income (approx. $800 / month) we end up way over on the means test and could be forced into a chapter 13.

I live in CA - my lawyer said I do not include UI as income on the means test.