Mortgage Payment and Means Test??

[kcfaninin]

Are we allowed to list our actual mortgage payment on line 20B of the means test or just what the local standard is? Our local standard is $788.00, but our actual Mortgage payment is $2325.

[DeadManCrawling]

List the actual.

This has been litigated and decided in most districts, and accepted in all the rest that I am aware of. Occasionally a trustee will challenge this, but it is pretty rare these days.

Seems common sense to me. I am amused that it even had to be litigated, since this expense cannot be changed on a whim.

My mortgage was nearly 4k per month, and we considered relying on it to get past the means test. Luckily, (or not), our income dropped below median of its own accord.

[kcfaninin]

I thought that was the case, but 2 attorney's we spoke with listed the local standard on Line 20B as $788 and our actual mortgage as $2325.

The means test said to subtract line B from line A and carry it over to the deduction column. Neither attorney listed the difference of $1537.

If this amount is added to the rest of our deductions, we would have a negative DMI on Line50.

I pulled out the means test from the first attorney we retained and he didn't give us credit for our full mortgage either. He wanted to put us in a Chapter 13 because it showed we had DMI of $1302. We said no thanks and sought out a 2nd opinion.

The 2nd attorney we retained did the same thing, didn't give us credit for our full mortgage. He figured us with $1730 DMI.

Anyway, I filled out the exact same means test as they did and I got a negative $602 of DMI. Am I missing something here?

[DeadManCrawling]

Possibly. I forgot to mention one critical thing.

If you are surrendering the house, you would list the approved limit, not the actual payment.

This has also been litigated.

You would, therefore, list the approved amounts for utilities and other housing related expenses.

If you are surrendering, you are subject to these limits. If you are not, I suggest reading more, searching the net, asking more attorneys.

[kcfaninin]

Possibly. I forgot to mention one critical thing.

If you are surrendering the house, you would list the approved limit, not the actual payment.

This has also been litigated.

You would, therefore, list the approved amounts for utilities and other housing related expenses.

If you are surrendering, you are subject to these limits. If you are not, I suggest reading more, searching the net, asking more attorneys.

NO, we plan to keep the house. I just can't figure out why the attorneys keep getting different figures than what I do. Simply list our current mortgage payment and we pass the means test.!!

I just want to make sure I am figuring Line 20B correctly and that I can actually claim the full amount before I argue my point to the legal assistant/attorney on Monday.

[DeadManCrawling]

There may be something specific to your district, but I can't begin to speculate.

It is possible that you might need to:

1. List the approved mortgage allowance on one schedule or part of the means test.

2. Add in the remainder, on a line that says something like "amount claimed above allowable mortgage or housing expense". This would be where you put the rest of your mortgage. If this is the case, it would also apply to your homeowner expenses like utilities, HOA, insurance, and so on.

It is possible that you are in a district that considers the difference between what is allowable, by federal standards, and the actual expense. If this is true, you could be dealing with a difficult trustee and court in general. I do not think that is likely, since most of these questions have been decided and are now considered to be case-law, but you never know.

What state and district are you in?

Best,

-dmc

[kcfaninin]

We are in Southern Indiana

[maddog2112]

Dear Kc, what do the lawyers say when you ask them straight out about it. I don`t think your district could be that different. I`m just south of you and my mortgage was 1460, with a 2nd of 1050. All was added in as actual expense with no problem. Your either missing something or your lawyers are doing something wrong.

[billf]

Possibly. I forgot to mention one critical thing.

If you are surrendering the house, you would list the approved limit, not the actual payment.

This has also been litigated.

You would, therefore, list the approved amounts for utilities and other housing related expenses.

If you are surrendering, you are subject to these limits. If you are not, I suggest reading more, searching the net, asking more attorneys.

Apparently not in the first circuit

http://lawprofessors.typepad.com/bankruptcyprof_blog/2009/08/1st-circuit-rules-that-debtor-may-deduct-mortgage-payments-on-the-means-test-even-if-he-intends-to-r.html

[DeadManCrawling]

Apparently not in the first circuit

http://lawprofessors.typepad.com/ban...ends-to-r.html

Great link! And good news for 1s Circuit filers even if they intend to surrender.

Too bad all the other districts don't concur.

Will be interested to see the further litigated in 1s District. Eventually one side or the other will take this highher and we will have a definitive answer.

For now, good news for 1st Circuit filiers who are surrendering.

I still wonder, though, if trustees are therefore more likely to invoke the "totality of circumstances" clause more often because of this issue.

[kcfaninin]

Great link! And good news for 1s Circuit filers even if they intend to surrender.

Too bad all the other districts don't concur.

Will be interested to see the further litigated in 1s District. Eventually one side or the other will take this highher and we will have a definitive answer.

For now, good news for 1st Circuit filiers who are surrendering.

I still wonder, though, if trustees are therefore more likely to invoke the "totality of circumstances" clause more often because of this issue.

How do I know if we are a "1st Circuit filer"? From what I have been reading on other websites, it looks like we can deduct our full mortgage on the means test.

If that's the case, why are the attorney's missing it? In one of our free consultations, we had to tell the attorney that we are allowed to list our full mortgage payment as a deduction on the means test. He said "oh yeah, that's right"

I am still waiting for attorney's office to call me to confirm if our mortgage is deductible. Not sure why it's such an issue, either it is, or it isn't.

[billf]

How do I know if we are a "1st Circuit filer"? From what I have been reading on other websites, it looks like we can deduct our full mortgage on the means test.

If that's the case, why are the attorney's missing it? In one of our free consultations, we had to tell the attorney that we are allowed to list our full mortgage payment as a deduction on the means test. He said "oh yeah, that's right"

I am still waiting for attorney's office to call me to confirm if our mortgage is deductible. Not sure why it's such an issue, either it is, or it isn't.

1st circuit is MA and most of New England but not CT - I suppose you could google it for your state

The link was elswhere on this site as well..