Update and Over reaction?

[LJoutWest]

Ok, got some items to share and then would like advice if we are just over reacting and stressing too much or if we look ok now.

Our lawyer has now updated and amended our schedules and filing to reflect our expenses. We are over the median for a Chapter 7 for our state but we are -$950 (just over that) on our income vs. expense. The UST is challenging a $500.00 expense we claimed for charitable contributions (we were doing it, and then stopped to pay bills but will return to paying it after discharge and our lawyer feels we should be allowed to claim it, does that sound correct?), so even if the $500.00 expense is not allowed we are still at -$450.00 which qualifies us. So the Chapter 7 should be ok I believe. Sound right?

We also had to answer a series of about 5 questions that our attorney said is given in our district to anyone who is over the median (and I confirmed with someone I know who did Chapter 7 about six months ago and was over the median, they got the same questions save one). Our attorney is going to give the UST everything on Wednesday which is the date per their request and then we just wait they say. The case should move forward, we make that payment to the trustee on the 1st and then on the 19th of January we are discharge. From what I've stated does that sound correct and can I stop losing sleep and stressing so much?

Thanks for your replies and reassurance. I never realized how nerve racking this all can be.

[AngelinaCatHub]

I cannot predict your future, but we became an asset case. We paid, we made it.

About the worry, why worry about things you cannot control? Time fixes that. You have already "handled" the things you do have power to correct, so why worry? Worry digs you an early grave. Quit your worry, as all things do work out, eventually. 'Hub

[Newstart10]

Did you pass the means test even though you were over the median income for your state?

[LJoutWest]

Did you pass the means test even though you were over the median income for your state?

I guess that is what I am saying is we failed the means test because our income is higher than the median but on the second part of the means test, we are at -$930 (rechecked the number) which means we pass the means test as we have no income to pay our debts. The dispute is with a $500 charitable contribution that we made every month until this year when we took that money to pay our debts. Our lawyer says we can still claim it based on court rulings while the Trustees office disagrees. Even if we take out the $500 we are at -$430 and thus we still qualify under the means test, the second part, correct?

We have to pay because when our lawyer filed instead of filing two days before I got paid (direct deposit) he filed the day after I got paid so that money was still in the checking account and the trustee took it as he can. Have money in the checking account as of the day of filing that is significant, the Trustee will take it to repay the creditors and then he/she gets a percentage of what is taken. Other than that payment we are a no asset case or did taking the money make us an asset case?

So my question still is does this look like it is still on track now for the Chapter 7? In terms of worry, I guess I need to remember "It is what it is" and leave it at that. Sometimes its hard when in the middle of this to step back and see what is going on. Just trying to clarify. Thanks!

[AngelinaCatHub]

I guess that is what I am saying is we failed the means test because our income is higher than the median but on the second part of the means test, we are at -$930 (rechecked the number) which means we pass the means test as we have no income to pay our debts. The dispute is with a $500 charitable contribution that we made every month until this year when we took that money to pay our debts. Our lawyer says we can still claim it based on court rulings while the Trustees office disagrees. Even if we take out the $500 we are at -$430 and thus we still qualify under the means test, the second part, correct?

We have to pay because when our lawyer filed instead of filing two days before I got paid (direct deposit) he filed the day after I got paid so that money was still in the checking account and the trustee took it as he can. Have money in the checking account as of the day of filing that is significant, the Trustee will take it to repay the creditors and then he/she gets a percentage of what is taken. Other than that payment we are a no asset case or did taking the money make us an asset case?

So my question still is does this look like it is still on track now for the Chapter 7? In terms of worry, I guess I need to remember "It is what it is" and leave it at that. Sometimes its hard when in the middle of this to step back and see what is going on. Just trying to clarify. Thanks!

I will assume you Tithe. This has been upheld by the Court, but (Liberal) Trustees do not agree. I don't have a lot of time for research so Google some of this law on bk and tithing. "Justbroke" had a bit of case law on his name so you might attempt to search this site on this subject.

In any case, you gave your heart, the Tithe will come back with your success. This is called Faith. 'Hub

[calgirl67]

We also had to answer a series of about 5 questions that our attorney said is given in our district to anyone who is over the median (and I confirmed with someone I know who did Chapter 7 about six months ago and was over the median, they got the same questions save one). Our attorney is going to give the UST everything on Wednesday which is the date per their request and then we just wait they say.

We are over median and filing Ch 7. We just pass the means test. Wat were the 5 questions?

[backtoschool]

Tithing $500 a month is probably going to be questioned by the US Trustee.

[viking64]

Actually, if the contribution is no greater than 15% of gross income, it should be allowed.

http://www.************************/...in-bankruptcy/

Sections 707(b)(2) and 1325(b) of the bankruptcy code allow a chapter 7 or chapter 13 debtor to claim an expense for charitable contributions, including tithing to a religious organization. This has the possible effect of allowing a debtor to qualify more easily for chapter 7, or allowing a chapter 13 debtor to pay less money into his or her chapter 13 plan.

But what amount should the debtor list a monthly tithing expense? Should the amount be what the debtor has been paying prior to filing the bankruptcy, or should it be what the debtor will pay after filing the bankruptcy?

The answer, under sections 707(b)(2) and 1325(b), is that the tithing expense ought to consist of what the debtor will pay in the future. This will usually be a larger figure than what the debtor had paid just prior to filing bankruptcy, when he or she may have been under significant pressure to pay creditors.

Section 1325(b) uses the 15% limit:

http://www.law.cornell.edu/uscode/usc_sec_11_00001325----000-.html

(ii) for charitable contributionsamount not to exceed 15 percent of gross income of the debtor for the year in which the contributions are made; and

emphasis mine

[good2free]

Hello,

Do you mind telling me which state and county you are in.

I filed on 10/13 and my 341 was continued to 12/8 because the UST wants to see my complete 2008 returns. Layer screwed up this. I am in San Jose,CA. My discharge date is also same as yours 1/19. Hope things will go smoothly for us.

They did not ask me anything about the money in my bank account. I have 15K in my account out of which 13K was exempted. I hope the trustee won't ask for a check for 2K on my next 341. (Wild card exemptions here in CA is about 23K). My car which is 10K is also exempted.

thanks

[LJoutWest]

good2free, I sent you a PM.

In terms of tithing we can show a history via our tax returns of paying x amount each year and it wasn't until this year that it became an issue due to bills. We can put down what we have paid this year, and then put down what we will be paying moving forward up to 15%. UST seems fine with that one now.

This may sound weird, but I've gone from being anxious and fretting and losing sleep over this to really realizing that our attorney of 18 years knows what he is doing (the payment I found out was our fault as my wife did not get him the paperwork when she should have for filing before my direct deposit hit), and I have to hope after filing the amended documents today that we will be ok. In the end, all we can do now is wait for their reply and then respond. In the meantime we have a life to live, work to do and family stuff to do.

On a side note, can we buy a few Christmas presents for our kids or should we postpone that until after the date for objections is closed in January?

[JoeBankrupt33]

LJoutWest,

In my state (CO), the trustee can only take 25% of the amount in your checking account if you can show that the amount is from wages. I knew this going into my 341. The trustee told me that he wanted the entire balance without asking me the source of the funds. I think this was wrong of him to do this, but I mentioned right away that the money was from wages and he deducted the 75% without any hassle.

Also, in CO, they won't bother if your total non-exempt assets are less than $2000.

It helps a lot if everyone knows what state you're in, since all states are different and the best advice is from someone in the same state. You can edit this in your public profile so it shows up with your posts.

[LimpDisc]

I will assume you Tithe. This has been upheld by the Court, but (Liberal) Trustees do not agree. I don't have a lot of time for research so Google some of this law on bk and tithing. "Justbroke" had a bit of case law on his name so you might attempt to search this site on this subject.

In any case, you gave your heart, the Tithe will come back with your success. This is called Faith. 'Hub

So do you ask if your trustee is liberal or conservative? If your trustee questions your charitable donations do you automatically label him a liberal? This liberal & conservative crap is getting so old!!!

[justbroke]

So do you ask if your trustee is liberal or conservative? If your trustee questions your charitable donations do you automatically label him a liberal? This liberal & conservative crap is getting so old!!!

There are liberal and conservative Trustees. I don't mean them in the political context, but certainly in how they construe the Bankruptcy Code. A liberal Trustee will take a more aggressive approach and question everything on your schedules, taking a liberal reading of the statute. The conservative Trustee will take the "plain meaning" of the statute, and not get into questions over whether something, like charitable contributions, is allowed by the code... even though it clearly is.

For the original poster's case, the problem is that they did not "continue" to make those contributions. The Trustee's liberal interpretation of the code is that the contribution needs to be continuous and since the OP stopped the contribution (and/or decreased the contribution), that is reason to object to the claim.

Even if the OP were to not take that charitable contribution deduction, the OP still have a significant negative disposable income, so I don't see ay other issues. Of course, the Trustee is "picking" away at little things to try to get the disposable income up in the abuse range.

Personally, I'd want to know if the Trustee liberally or conservatively construes the Bankruptcy Code. I don't want to have a Panel Trustee nor United States Trustee who pushes the envelope. Like those in some Districts that believe that you must pay some dividend to the unsecured creditors and force people into at least a 10% plan. Absurd if you ask me.

[LimpDisc]

There are liberal and conservative Trustees. I don't mean them in the political context, but certainly in how they construe the Bankruptcy Code. A liberal Trustee will take a more aggressive approach and question everything on your schedules, taking a liberal reading of the statute. The conservative Trustee will take the "plain meaning" of the statute, and not get into questions over whether something, like charitable contributions, is allowed by the code... even though it clearly is.

For the original poster's case, the problem is that they did not "continue" to make those contributions. The Trustee's liberal interpretation of the code is that the contribution needs to be continuous and since the OP stopped the contribution (and/or decreased the contribution), that is reason to object to the claim.

Even if the OP were to not take that charitable contribution deduction, the OP still have a significant negative disposable income, so I don't see ay other issues. Of course, the Trustee is "picking" away at little things to try to get the disposable income up in the abuse range.

Personally, I'd want to know if the Trustee liberally or conservatively construes the Bankruptcy Code. I don't want to have a Panel Trustee nor United States Trustee who pushes the envelope. Like those in some Districts that believe that you must pay some dividend to the unsecured creditors and force people into at least a 10% plan. Absurd if you ask me.

Maybe it's just me, but I would think the trustee is only doing his job by "picking" away at the little things. I would think that the $500 charitable donation would be questioned by a liberal or conservative if they were doing their job.

I hope my trustee doesn't pick away at the little things in my petition, but I expect nothing less. I have charitable donations that might be questioned, but I won't label him a liberal or conservative by doing so. Just my opinion.

[justbroke]

Maybe it's just me, but I would think the trustee is only doing his job by "picking" away at the little things. I would think that the $500 charitable donation would be questioned by a liberal or conservative if they were doing their job.

There's doing your job, and then attempting to re-write the bankruptcy code by practice. The problem with the Panel and UST is that they wield a lot of power, and most debtors/attorneys don't want to fight with them. Making it worse, you get variances within how the BK Code is implemented by these Trustees... even within the same District.

Point in case... my $435/month charitable contribution wasn't even mentioned. My Trustee is known to be conservative (doesn't push the law). As a matter of fact, my Trustee didn't even question extremely questionable things on my B22C (Means Test). I put things in the wrong place (like putting my property taxes on line 26). Luck of the draw!

Would this have changed my 0% payment... absolutely not. So maybe some just like to be... difficult. Who knows.

I hope my trustee doesn't pick away at the little things in my petition, but I expect nothing less. I have charitable donations that might be questioned, but I won't label him a liberal or conservative by doing so. Just my opinion.

Call it picking on you or something else, it is definitely in the way they interpret the Code. Trustees are so divergent, there are attorneys who know how to "game" the system so that a particular Trustee and/or Judge presides over a particular client's case... for a reason! Yes, we don't have to label them, but believe me... around the District, they probably have worse names for the Trustee who picks apart every expense.