HELOC payment means test calc

[ToughSpot]

We have a HELOC 2nd on which we pay interest only (about $550/mo) via auto pay from our checking account. Can I pay more for the few months before we file and take the actual amount we paid or will that look like we are stacking the deck for the means test?

[2manybills]

They didn't even question my HELOC. The "OC" is so backed up right now. I am 85 days post 341 and have been told by the clerks that it's more like 120 days.

The one and only question we had was "are we keeping the house". That is all the UST wanted to know by email from my attorney. Other than that our 341 last a whole 3 minutes. Be sure you are prepared, be sure your attorney has provided everything that is required and it will be a breeze.

[UpsideDownMI]

Can I pay more for the few months before we file and take the actual amount we paid or will that look like we are stacking the deck for the means test?

No. You should only list what you are contractually obligated to pay.

[aljohnson007]

Correct , Upside. You can't pad the books. Just be honest.

[OhioFiler]

No. You should only list what you are contractually obligated to pay.

This is not quite true. The contract specifies the minimum payment in interest only. At some point principal must be paid. As long as you are paying more than the minimum you can claim more on your schedules. Just be prepared to explain and prove it should the trustee ask.

[UpsideDownMI]

This is not quite true. The contract specifies the minimum payment in interest only. At some point principal must be paid. As long as you are paying more than the minimum you can claim more on your schedules. Just be prepared to explain and prove it should the trustee ask.

I have to respectfully disagree. Again, the debtor should only list what he is contractually obligated to pay. The HELOC note has provisions to reduce principle after a set period of time. HELOC's are typically interest only for the first 10 years and principle and interest for the next 20 years.

Based on this, the op should not list both principle and interest until it is required by the loan. A debtor does not have an inherent right to reduce principle when a loan is interest only. Especially when it could be the difference between passing or failing the means test.

[2manybills]

My question to the OP is that will this make a difference whether you will pass the means test or not? We listed only the payment that we make, but again, no one asked. There was 84 people on the calendar with us that day in between the hours of 1 and 3:00 p.m. The TT is pretty basically pushing people through the day.

[DeadManCrawling]

Contractually obligated means different things to different courts, judges, and districts.

For instance, our monthly mortgage (only a first, no second), has a three option payment plan. In our district, it is customary to use the second-highest number, which equates to the standard rate as figured under a 30 year mortgage with interest.

The other two options are:

Interest only, which results in the property becoming progressively mre underwater

Interest and part of principal which results in a slower pace of becoming underwater.

The accepted standard here is the first option, full payment.

The difference is substantial. First option is a payment of 3600/month. The lowest option is 2200/month.

You can see what that would do to the means test.

We are about to find out the truth, and will report back, but these things seem to vary by district. And judge.