Over Median = UST involvement/fraud suspect?

[Kingxray]

There are two things. There's the random audit, which is done "randomly" by computer. Then there's the UST involvement. The UST is involved in all cases, as they must review them.

What we are talking about in this thread, and what we mean by "the UST is involved", is that the UST has taken interest in the case and is request more documentation and/or filing a presumption of abuse or dismissal.

In both of our BK filings the UST filed a presumption of abuse and motion to dismiss, so unfortunately I am quite aware of the meaning of this thread and the involvement of the UST.

[keepmine]

So, this may sound like a stupid question, but what exactly is the UST looking for when they presume abuse?? Are they looking for more income than documented? Are they looking for large unaccounted for expenses (big TVs, etc?)

I'm wondering now... when we file... we were going to wait until my husband's bonus wouldn't show up on the six month look back. But, if the UST is going to get involved ($8K over median income, DMI = $96), is it even worth it to wait another three months?! He received a 5K gross bonus back in June. If the UST is going to ask for bank records & pay stubs dating back further than 6 months... well... there goes THAT idea.

I am beginning to wonder if we should just go ahead and file ch13. If you go ahead and file ch13, does the UST get involved if you are over the median, too? (ETA: I mean... do they get involved in the extent of suspected fraud like they do if you file ch7 and are over the median?) We only have 40K unsecured debt and gross yearly income is 89K NOT including the 5K bonus (median is 81K).

First thing you need to do is calm down and stop overthinking this.
At the end of the day, you file the chapter of bk you qualify for. So what if you're a bit over the median and the UST asks for more documentation? Just provide what they ask for. Don't give up on a Chapter 7 because you're afraid of a bk trustee. They can't eat you. If you can't meet the requirement for a 7 then convert to a 13. That option is always available to you. Don't get bluffed into a 13 before you file.

[PacificBlue]

First thing you need to do is calm down and stop overthinking this.
At the end of the day, you file the chapter of bk you qualify for. So what if you're a bit over the median and the UST asks for more documentation? Just provide what they ask for. Don't give up on a Chapter 7 because you're afraid of a bk trustee. They can't eat you. If you can't meet the requirement for a 7 then convert to a 13. That option is always available to you. Don't get bluffed into a 13 before you file.

I LIKE THAT ADVISE KEEPMINE!!!

We have no assets other then income, and about 10k in a mobile home in a retirement park. (we pay space rent). Our income goes for expenses to live the normal life, then extra for my battles with cancer. It's a very, very expensive disease to battle.

The difference between a 13 and a 7, could mean the difference between life and well.. not life for me. We do not feel we can risk putting ourselves into a 13, so we have to take our chances with the 7. (and, the fact of the matter is, a 13 plan could outlive me). If it came to a month were money was tight, and it was make a payment on the 13 or go to the doctor, that 13 isn't even a factor in my mind.

There is only one area that concerns us in our situation. We were told to "keep it under wraps" until it's filed and done with. I can tell you it may actually become a case that will get a lot of public attention. (even though, I do not want our names on the ABC evening news tagged along with BK, but if it has to go that way, then it has to).

So, here's hoping the UST will give it a glance, improve it and we can drop all this extra stress that so needs to just be gone right now.

disclaimer: Yes it took a couple of years to get us into this mess, and I'm real enough not to expect it to be an instance "clean sweep".

[RBisDebtFree]

$31k over median, negative DMI, no issues with UST...

I didn't read the whole thread but just wanted to asnwer to the original post!

[coolmom04]

First thing you need to do is calm down and stop overthinking this.
At the end of the day, you file the chapter of bk you qualify for. So what if you're a bit over the median and the UST asks for more documentation? Just provide what they ask for. Don't give up on a Chapter 7 because you're afraid of a bk trustee. They can't eat you. If you can't meet the requirement for a 7 then convert to a 13. That option is always available to you. Don't get bluffed into a 13 before you file.

Thank you for that You're right... I am seriously overthinking this... and I do need to calm down!!

[coolmom04]

$31k over median, negative DMI, no issues with UST...

I didn't read the whole thread but just wanted to asnwer to the original post!

Wow! That's good to know Thank you! Can I ask what state you are in?

[dakota112]

Kaionsmom was your unsecured >100K?

[PacificBlue]

Wow! That's good to know Thank you! Can I ask what state you are in?

Don't know about them, But 31k over and got a 7.. I'm in the "state" of shock

[justbroke]

So, this may sound like a stupid question, but what exactly is the UST looking for when they presume abuse?? Are they looking for more income than documented? Are they looking for large unaccounted for expenses (big TVs, etc?)

The answer to the question is actually in the question itself. They are looking for abuse of the Chapter 7 bankruptcy code. Specifically, though, they are looking to see that your expenses (and income) are legitimate when you have the appearance of not being "needy" (that's a bankruptcy term but it's not defined.) That's why over-the-median isn't considered particularly "needy".

I'm wondering now... when we file... we were going to wait until my husband's bonus wouldn't show up on the six month look back. But, if the UST is going to get involved ($8K over median income, DMI = $96), is it even worth it to wait another three months?!

Yes, it's worth the wait. As I have written countless times on this forum, it's best to go under the radar (under the median) so that you don't get the full fury of the UST. Of course, many over-the-median income debtors do get discharges, but it's usually after being scrutinized at a level of detail that makes the IRS say "wow!".

I am beginning to wonder if we should just go ahead and file ch13. If you go ahead and file ch13, does the UST get involved if you are over the median, too?

The UST hardly ever gets involved in or "scrutinizes" Chapter 13 cases. You have to look to what the UST Program has been chartered to do. That is, basically, deny as many Chapter 7s as possible and offer Chapter 13. The only time a UST really gets deep in a Chapter 13 is when there is fraud.

[coolmom04]

Kaionsmom was your unsecured >100K?

No - we only have $37K unsecured debt.

Don't know about them, But 31k over and got a 7.. I'm in the "state" of shock

WOO HOOO!!

The answer to the question is actually in the question itself. They are looking for abuse of the Chapter 7 bankruptcy code. Specifically, though, they are looking to see that your expenses (and income) are legitimate when you have the appearance of not being "needy" (that's a bankruptcy term but it's not defined.) That's why over-the-median isn't considered particularly "needy".

Yes, it's worth the wait. As I have written countless times on this forum, it's best to go under the radar (under the median) so that you don't get the full fury of the UST. Of course, many over-the-median income debtors do get discharges, but it's usually after being scrutinized at a level of detail that makes the IRS say "wow!".

The UST hardly ever gets involved in or "scrutinizes" Chapter 13 cases. You have to look to what the UST Program has been chartered to do. That is, basically, deny as many Chapter 7s as possible and offer Chapter 13. The only time a UST really gets deep in a Chapter 13 is when there is fraud.

As always... thank you

[RBisDebtFree]

In in WA. Negative DMI though -- this is very important -- also, we were allowed to include our mortgage payment into the means test for the house we surrendered.

Now, my question is to figure out to live according to our median and that $31k will be in my pocket every year!

[coolmom04]

In in WA. Negative DMI though -- this is very important -- also, we were allowed to include our mortgage payment into the means test for the house we surrendered.

Now, my question is to figure out to live according to our median and that $31k will be in my pocket every year!

That's fantastic!!

I don't handle stress well lol My husband usually handles all this mess, but when I took over the bills about three months ago... all this became MY stress! He has no idea what is going on really. I don't know what's going to happen when we meet with the attorneys.. he's the one filing and I am the one doing all the talking! Anyway.. that's OT sorry

[justbroke]

In both of our BK filings the UST filed a presumption of abuse and motion to dismiss, so unfortunately I am quite aware of the meaning of this thread and the involvement of the UST.

I think I mean to say that the UST's interest in a case (involvement) is not random. I thought you indicated that a computer "randomly" chose your case for the additional look ("Our lawyer says it is done randomly by the computer.").

I wanted to make sure others understood the difference between the Random Audit, and being selected for further scrutiny by the UST... and that they are separate things. The former being performed by a third party, and the latter being done by the UST's office.

[thereshope]

How much over the median are you ? Are you still going to have the same income post-discharge (as in reduced income) ? Just curious as we are over the median by $7-$10k on Form B22a and more than that on an annual basis.


Meatstick

I'm over the median by about $12K, my income won't change once I discharge. I don't anticipates any changes for at least 6 months to my income.

[albacore44]

I'm planning on filing with 4 people, wife + 2 chilldren. i will be over the median mainly due to the unemployment Insurance my wife has been receiving. based on my analysis, i think I can fit into a Ch-7 due to high mortgage payment, 2 car payments, and all the IRS mandated expenses for food, utilities etc. however one thing i just realized since my wife took a tax preparation class, is that i should be able to include my sons wife and mother-in-law who both live me but don't contribute living expenses. i should have been claiming them on my income tax as they are considered part of my household. So if i add them in it would make my DMI way negative (-), so i plan to discuss this with my attorney, and see what is the best way to go, me + 3 dependants, or me + 5 dependants. i really dont want the UST picking my filing apart, and arguing over who counts and who doesnt