With a Threshold debt payment amount < 25% Can I automatically Pass the Means Test

[UpsideDownMI]

I understand I'd have some trouble with expenses, I'm just wondering if the 25% limit is ever used?

iron clad" to avoid being dismissed or converted.

[debtinohio]

iron clad" to avoid being dismissed or converted.

This is great information - thanks :-)

[debtinohio]

Thanks everyone - it's been a long road and I'm just exploring ALL options. The 215K debt came from a 3 year divorce/custody battle with an unlimited funds opponent (In the end I did get my kids 70% of the time, but I do pay her a significant amount monthly now - hence the lower take home pay), $50,000 in a failed business (on business cards) and the rest bad decisions in regards to real estate investments.

Ironically the last couple years worth of credit card statements I'm fine with, since I used one set of cards for all household expenses (AMEX) I was able to pull categorized reports and receipts for almost all questionable expenses anyway.

[klandsb]

Ok. So now on your other post you make it sound like its a Chaper 13 and your attorney will have the paperwork back to you on Friday !!!!

[OhioFiler]

I think most of your expenses are legitimate. I'd find me a good attorney and go for it.

[debtinohio]

Ok. So now on your other post you make it sound like its a Chaper 13 and your attorney will have the paperwork back to you on Friday !!!!

Yes, it's his first attempt at my means test which he will get back to me on Friday, at which time he said he would let me know his thoughts on the 7.

I'm guessing a lot of people teeter on the edge of Chapters and have these same questions.

The other post is specific to the Trustee in my area, it will most likely end up as a 13 but if I did not at least inquire about a 7 I'd wonder the next 5 years.

[DeadManCrawling]

I feel for you. I had a semi-high income, 500k+ per year, until a devastating back injury a few years ago.

One of the hardest things, for me anyway, was adjusting to this new reality. Your situation is very different, but similar in other respects. A repositioning of priorities is certainly beneficial, deciding what things (material, psychological, family, emotional) are most important, and rearranging your life and finances to handle the circumstance, whether that be Ch7 or Ch13.

I've had a few years to consider it from all angles and also spent the time researching the intricacies of BK law. In the end, I (and my family) are better off for making a few sacrifices that pay off very big in other ways.

I wish you the best of luck, whatever road you choose. This can be a life-changing experience. Whether it is a good or bad result is largely dependent on you.

Best,

-dmc

[klandsb]

debtinohio.... There is another member Liz417 who was over median and got a chapter 7.. I believe if I am thinking clearly she went to 6 lawyers before she found one to do a chapter 7.... Read her post if u get a chance and maybe even send her a private message... She might give you some insight...

[debtinohio]

I think most of your expenses are legitimate. I'd find me a good attorney and go for it.

I'm at least pushing him for it, I don't have $500 music lessons, BMW 7 Series, country club memberships, etc. and with the BASICS and my court ordered child support payments it gets me in the range so why not look at it. I have basic cable and an $18 netflix subscription listed as "entertainment" the $120 for a tutor is documented as needed by the school and the ONLY activity for my kids is a $120/month cheer lesson for one of them and she's been in that for 3 years. No other outrageous stuff, the cars are above the IRS guideline payments but even if they only allowed the $489/car I'm still right there negative once everyone is in and WAY under the 25% threshold.

Now, do I want to go through the ringer with the UST audit? That is tough, it is A LOT of stress on my family so I may just choose not to bother and just do the 13.

$2400 house (-20,000 equity)
$1150 cars (yes, this is over the guidelines by $250)
$500 utils (gas, water, electric, $75 cable, sewer, garbage,phone) ( I have detailed records to back this up they are all on a budget plan and have been for 3 years)
$1650 food/clothes/personal ( I have detailed records to back this up)
$415 gas ( I have detailed records to back this up)
$140 car insurance ( I have detailed records to back this up)

6 month average take home pay is $6568 -above expenses = around $300 and I did not add anything else in there. No way $500 in utilities is high for our house in frigid O-H-I-O

[debtinohio]

I feel for you. I had a semi-high income, 500k+ per year, until a devastating back injury a few years ago.

One of the hardest things, for me anyway, was adjusting to this new reality. Your situation is very different, but similar in other respects. A repositioning of priorities is certainly beneficial, deciding what things (material, psychological, family, emotional) are most important, and rearranging your life and finances to handle the circumstance, whether that be Ch7 or Ch13.

I've had a few years to consider it from all angles and also spent the time researching the intricacies of BK law. In the end, I (and my family) are better off for making a few sacrifices that pay off very big in other ways.

I wish you the best of luck, whatever road you choose. This can be a life-changing experience. Whether it is a good or bad result is largely dependent on you.

Best,

-dmc

Thanks so much!

[HHM]

You are completely misunderstanding the 25% rule. The law does not say you must be able to pay back at least 25% in order to be converted to a chapter 13. The law is, IF you can pay back 25% or more, then your case is presumed an abuse, but the corollary that if you cannot pay back 25% is NOT the case.

The bottom line is; if you can pay back $166 per month ($10,000) in 60 months, the court under code section 707(b) presumes your chapter 7 is an abuse and will file a motion to dismiss.

[shabam]

The bottom line is the only rule I know of. I have never heard of any 25% rule.

So the question is, do you risk it and waste time and money trying for a ch 7 or do you just go for a 13. Going for ch 7 is certainly not going to be some walk in a park. Remember, a UST can and has dismissed many cases for a 'totality of circumstances'. Nothing more needed.

[debtinohio]

The bottom line is the only rule I know of. I have never heard of any 25% rule.

So the question is, do you risk it and waste time and money trying for a ch 7 or do you just go for a 13. Going for ch 7 is certainly not going to be some walk in a park. Remember, a UST can and has dismissed many cases for a 'totality of circumstances'. Nothing more needed.

The 25% is part of the means test.

But yeah, time may be better spent proving the expenses for a 0% unsecured 13.

[OhioFiler]

I'm at least pushing him for it, I don't have $500 music lessons, BMW 7 Series, country club memberships, etc. and with the BASICS and my court ordered child support payments it gets me in the range so why not look at it. I have basic cable and an $18 netflix subscription listed as "entertainment" the $120 for a tutor is documented as needed by the school and the ONLY activity for my kids is a $120/month cheer lesson for one of them and she's been in that for 3 years. No other outrageous stuff, the cars are above the IRS guideline payments but even if they only allowed the $489/car I'm still right there negative once everyone is in and WAY under the 25% threshold.

Now, do I want to go through the ringer with the UST audit? That is tough, it is A LOT of stress on my family so I may just choose not to bother and just do the 13.

$2400 house (-20,000 equity)
$1150 cars (yes, this is over the guidelines by $250)
$500 utils (gas, water, electric, $75 cable, sewer, garbage,phone) ( I have detailed records to back this up they are all on a budget plan and have been for 3 years)
$1650 food/clothes/personal ( I have detailed records to back this up)
$415 gas ( I have detailed records to back this up)
$140 car insurance ( I have detailed records to back this up)

6 month average take home pay is $6568 -above expenses = around $300 and I did not add anything else in there. No way $500 in utilities is high for our house in frigid O-H-I-O

I'd like to see what "personal" includes.

[debtinohio]

I'd like to see what "personal" includes.

This some kind of jab? From 22C/A:

Food, clothing, household supplies, personal
National Standards: for 5 person households
source: U.S. Trustee, standards for cases filed on or after November 1, 2009