"tweaking" Means test numbers

[iwannawon]

I met with a second attorney today. He said something the first guy didn't. My goal (ch 7) is to keep our car and house since we're current. He said our Means test mdi needs to be (slightly) positive or we won't be able to reaffirm those debts... it will look like we can't afford them. He said (without making #s up) they can be 'tweeked' here and there to get the right result. I'm looking over the form he printed and most of them are based on irs standards. Other than actual income, tax witholdings and mortgage & car payments, etc I don't see anything that can really be changed. Is it common to use the 'adjustment' lines to add to the standards for things like groceries or utilities?

If expenses aren't easily adjusted, are one-time family $ gifts considered income? If we end up slightly negative could we essentially inflate the average monthly income by receiving a well timed gift?

A bit of a tangent but income says it's a 6 month average. Mine changes depending on which 6 months are used since i'll get paid 3 times (every 2 weeks) during 2 months of the year. Seems odd that such a long term outcome could potentially change if i file in July (basing income from jan - jun) or file in january (basing it on jul - dec) which would end up quite a bit higher. Am i missing something?

Thanks.

[Chowder]

He said (without making #s up) they can be 'tweeked' here and there to get the right result.

I was asked to turn in honest numbers by my Attorney. He tweaked to what he knew the trustee would accept without question.

are one-time family $ gifts considered income?

They can absolutely be considered income in a BK.

A bit of a tangent but income says it's a 6 month average. Mine changes depending on which 6 months are used ...

Many of us plan for that advantageous 6 month period.

[killinstinct]

I had a similar situation income-wise as I am paid every two weeks, or 26 times a year. If your paychecks are rougly similar throughout the year, it won't matter when you file because any way you cut it one of the six months will include one of the "three-paycheck" months. So your income will be the same either way. Remember, it's all income earned for six months preceeding the month you file (i.e. you file any day in the month of August, you include income from February 1- July 31).

If you get some type of bonus in December or January, then that changes things. Make sure that's outside the six-month window then. Another common strategy is that teachers will file insuring the summer months are in the six-month window, to have lower income calculations.

[destitute]

It's my understanding that the means test is used as a look back to "qualify" you for a chapter 7. The numbers that matter for reaffirmations are those on schedule I and J. In my case I was negative on the I & J by a little bit and needed to reaffirm my car (new one I purchased just before filing) so since I'm self employed my attorney adjusted my "estimated" taxes to make the numbers work leaving me with $2 per month after the car payment.

[iwannawon]

It's my understanding that the means test is used as a look back to "qualify" you for a chapter 7. The numbers that matter for reaffirmations are those on schedule I and J. In my case I was negative on the I & J by a little bit and needed to reaffirm my car (new one I purchased just before filing) so since I'm self employed my attorney adjusted my "estimated" taxes to make the numbers work leaving me with $2 per month after the car payment.

Thanks. i'll look into I & J. sounds like i've put too much importance on the Means test, going forward.

[Calthius]

One time family gifts are not considered income.

$$ from parents is not considered income. It is a gift. Under IRS guidelines Gifts to $13,000 are not income this was also confirmed by my lawyer. As my Parents helped us out and gifted $2,000 for a down payment on a van about a month before we filed. It isn't included as income for BK or for Tax info.

[lovebirds]

Gifts can still be considered income for the Means test. Taxes are a different issue.

[Calthius]

Gifts are not considered income. Don't take my word for it talk to your Lawyer. But mine told me as long as it is a gift it is not included in the means test and doesn't count as income. He also told me to get a letter from them stating that it was in fact a gift.

[lovebirds]

Maybe for your trustee, gifts are not income. Every trustee is different. Pretty much expect everything to be counted as income unless told by your lawyer differently. My personal injury settlement is considered income so I have to wait to file.

[Amy26]

Gifts were not considered income for me either. My lawyer told me that... it has been a debated topic on here for a while... some people say it is and some say it doesn't... but I didn't include gifts on my bk.

[southernbelle]

He said (without making #s up) they can be 'tweeked' here and there to get the right result. I'm looking over the form he printed and most of them are based on irs standards. Other than actual income, tax witholdings and mortgage & car payments, etc I don't see anything that can really be changed. Is it common to use the 'adjustment' lines to add to the standards for things like groceries or utilities?

My atty asked me to fill out his questionnaire and to give him actual figures and he did "tweek" the numbers a bit on flexible expenses before I filed. I also questioned this "tweeking" and he assured me that it was routinely done and my case went fine. It might be common practice to use the gray areas to your advantage sorta like what accountants do at tax season. Not saying it's right but that's my experience.

[iwannawon]

Gifts were not considered income for me either. My lawyer told me that... it has been a debated topic on here for a while... some people say it is and some say it doesn't... but I didn't include gifts on my bk.

if it works in our favor to be considered income and i include it, could they force me to take it off?

[lovebirds]

I thought if you had positive money after filling out the 2nd half of the means test, you would be forced into a Chapter 13.