Error on Schedule J

[ksguerri]

Hi. New to the forum. Filed ch. 7 and have 341 in a week and noticed big error on schedule J - for medical expenses says $1000 per month instead of 100. We are pro se. Do I send an updated J to the Trustee, or wait for the 341 and point it out to the trustee? We are under the state median by about $15,000, but the error changed the DMI from minus $125 to a positive $700.
Thanks for the help!
Calbk

[music12]

sorry to say, you are in grave danger of a ch13 due to your disposable income. spend this week finding $700 worth of monthly expenses...

[coolmom04]

I am obviously new and learning, but the one thing I HAVE learned in the past couple of days is that the pp is absolutely right - you are in grave danger of ch13

[LimpDisc]

sorry to say, you are in grave danger of a ch13 due to your disposable income. spend this week finding $700 worth of monthly expenses...

Not sure how that can be done. How can you resubmit with an additional $700 in expenses? I know you can amend your schedules, but that's a big change. Won't the trustee ask why they weren't listed in the original filing?

[BobMango]

We went to our 341 and answered yes when the trustee asked if we had any changes. We were modifying our Schedule J to show a positive DMI so we could get our attorney to approve a reaffirmation. Trustee did not have any problem with it. This was an adjustment of almost $700 in reduced expenses.

I'd spend some time adjusting your Schedule J to get below $150 disposable to be safe from a 13, but if the expenses are allowable and you haven't listed them before, just indicate that after reviewing your schedules you noticed some changes that needed to be made. It's perfectly reasonable to think that you were more concerned with making sure everything else was correct that once the Schedules I and J were negative you didn't spend any more time on them.

[ksguerri]

Thank you. That's what I was thinking about doing. So, if I understand correctly, even if you are under the median income for your state, you can still be put into a ch. 13?
Calbk

[BobMango]

Thank you. That's what I was thinking about doing. So, if I understand correctly, even if you are under the median income for your state, you can still be put into a ch. 13?
Calbk

Yes, that was confusing to me too, since a plain reading of the law (and Nolos book) seems to indicate that if you are under the median you qualify for Chapter 7, period. What the means test really does is indicate if there is a presumption of abuse. Above the median and positive on your DMI? Looks like a presumption of abuse and you'll be kicked to a Chapter 13 or dismissed. Above the median and negative on DMI or below the median and positive on DMI, could go either way. Generally if you have positive DMI above a certain limit they will look hard to push you to a 13.

[justbroke]

There are two limits for positive DMI in a Chapter 7. The first threshold is at $109.58 and anything over that is presumed to be an abuse. The second threshold is $182.50. If your DMI is over $109.58 and less than $182.50, you can rebut the presumption of abuse by having special circumstances, of that your DMI when multiplied by sixty (60) is less than 25% of your unsecured debt.

So there is an hard limit of $182.50 for abuse.

[mtbc]

Oh, cool, thanks, that's good to know. Our unsecured debt exceeds half a million dollars so dividing that by 240 is still plenty!

[ksguerri]

Dmi

Thanks so much! I am in the process of amending schedule J -we'll see what happens. It's pretty surprising that people who have so little and are able to put a few hundred in the bank because they have stopped paying creditors still are forced into a ch.13. Things sure have changed -I know that before the law was changed there was a great deal of abuse - running up cc debt on purpose - but, as always, they over-corrected the law.
Cal bk

[good2free]

I made some changes in Schedule J at my 341. Do not worry trustee will give you the opportunity at the beginning of the 341 meeting it self.
Only problem I can see is that the UST may raise an eyebrow with DMI 700.

[ksguerri]

Thank you so much for the input. We are going to file an amendment to the original petition including expenses that were not on the original. We had omitted stuff like car registration (it's a fortune here in California), dog /vet expenses, gas bill, and this does end up eating up the $700. Don't know how the trustee looks at amendments. Hope it will be ok. I hope that another factor in our favor will be the irregularity of our income. It's bases largely on commissions, and, as anyone who's working in retail now knows, it's pretty bad. So some months we have a little left, and some months we don't.
Cal bk