Am I screwed?

[Penny Less]

Hey guys,

After several months of debating should I or should I not spend the last of my money on a lawyer I finally filed. Hurray (I hope).

I've been sick so I didn't follow thing as close as I probably should have. I am really wiped out right now physically and mentally.

Anyway here's my question: My 6 month average income was artifically higher because the first month of it I had a good contract. Now that contract is gone and I've lived off of the savings of that one month for the other 5. I made maybe a few hundred over that 5 month span just taking any small work I could and job hunting.

My living expenses are lower then my 6 month average by a few hundred. But...I haven't had any income this year. I am really really poor.

Could I get forced into a 13 because my expenses are lower then the average of the 6 months? Even though my contracts are gone and there's no money coming in right now and hasn't been for awhile?

Thanks!

[ChaseDidThis]

I don't know why everyone is always hung up on the 6 month lookback, basically that is used to show if the presumption of abuse arises and it does give you an idea of your expenses, but it all really hinges on schedule I and J and what your DMI works out to. Schedule I and j are forward looking. Are you self employed? If so, I could see then where it might come into play (average salary on an annual basis type of thing)

[Penny Less]

I'm self-employed. I'm a contractor, I don't have an LLC or any kind of "real" business. Mostly just a failure on my part to get hired with benefits. I got very lucky last year with a contract but it didn't last.

The hang-up is that on various parts of the forum I remember reading about how you can still file a 7 depending on the look back...but then if you have DMI left over then they can automatically ______?

I had a crappy as hell poverty level income in 2008, and early 2009 was my first real year of profits (made about 50k gross). The money is nearly gone, spent on my teeth, two rental leases, deposits, medical bills, and the lawyer.

So I qualified for Chapter 7 or my lawyer wouldn't have filed it, but I was a little out of it reviewing the paper work. He said something about my 6 month "average" monthly income being in the low 2k's but my expenses only 1500? Which seemed low to me...I spend alot on prescription drugs.

So would I automatically be screwed or can they say gee Penny has nothing incoming at all for awhile now we'll give her the chapter 7?

I'll poke around more on Monday, was just hoping for something here so I'm not worrying through the weekend. I can't seem to fetch the case on Pacer yet.

Thanks guys...

[ChaseDidThis]

Wish I could help more but not really familiar with how the self employed are handled in the courts, i would assume that common sense logic would play a part and based on history, maybe the last 2 years what could you expect to earn in the future, and use that as a current income, but don't really know. I can tell you that my 6 month look back and my current monthly income were different because DW didn't work anymore. Had the court used my last 6 months average income and current expenses, t would have looked like I had a DMI of well over $1000, which definitely is not the case as DW isn't employed anymore. My Curent income and expenses were used and it showed correctly that I had less than 50.00 left. Your DMI should be less than 100.00 to avoid being pushed into a chapter 13. You need to know what was listed in schedule I and J and how much DMI it shows. Hopefully someone with experience in self employment can chime in.

[Penny Less]

Thanks Chase. Pulled the pacer documents, was using the wrong court.

The I and J have the word "average" and that's what seems to be used.

BUT - there's a form at the end that shows the true picture for each month of what I made and the month I made it. Ex almost nothing, almost nothing, nothing, nothing, nothing, lots.

When they decide to go 7 or 13 is it automatic from this I and J stuff? Or do they puzzle over the other forms to figure it out? How did it work out for you - did your "real" income that month only go into the I and J part?

I don't see the words "disposable monthly income" on any part of my forms - if the above is automatic is there a line for it? Eg - Schedule J 20c?

Thanks!!!!!

[ChaseDidThis]

If you file ch 7, but they feel you could afford a 13, then they would have to compel you to convert to a 13 or dismiss your case altogether ( I think). it is not automatic you will see it coming or the possibility thereof. For me on that sheet that shows each month in the past it showed both my actual income and DW's actual income as she was working at the time, it also showed alot of overtime during that period. My schedule I showed just my average monthly Income as I was the only one working when we filed, based on 40 hr pay and less overtime than what the past 6 mo. lookback showed as that was not continuing at that pace. Dsposable monthly income is schedule I minus schedule J ( Income - Expenses).

[Penny Less]

Huh. Yeah the normal job income part of the form shows "projected" etc, but that's not for me. ;-)

The business stuff looks more strict - I think my lawyer had to use that 6 month number "Regular income from operation of business or profession or farm
(Attach detailed statement)" but I'll ask. My income certainly isn't "Regular" and hasn't been for over half a year.

I - J is about $600 positive.

Maybe I'll post something in the small business section - though if anyone here can comment based on their experiences that would be great. I'll certainly do the same when the time comes.

My 341 is about 30 days from now. Thanks for the feedback.

[ChaseDidThis]

Sorry couldn't help more, 600.00 DMI will surely put you into a 13 if thats accurate. I would start thinking of ways to increase your expenses listed on schedule J, make sure you are listing everything, most people forget about a lot of valid expenses that should be listed. Good Luck.

[Penny Less]

Thanks will try on Monday - I wish I had waited 10 days until Feb. My lawyer didn't bring this up at all - he did put that I had zero income for Jan 2010 in the petition comments. But I should have spotted it sooner.

I'm still a little angry about the schedule income number being so high when I've been making hardly anything. I think my true DMI is more like -500 with the current "real" income.

[OhioFiler]

Huh. Yeah the normal job income part of the form shows "projected" etc, but that's not for me. ;-)

The business stuff looks more strict - I think my lawyer had to use that 6 month number "Regular income from operation of business or profession or farm
(Attach detailed statement)" but I'll ask. My income certainly isn't "Regular" and hasn't been for over half a year.

I - J is about $600 positive.

Maybe I'll post something in the small business section - though if anyone here can comment based on their experiences that would be great. I'll certainly do the same when the time comes.

My 341 is about 30 days from now. Thanks for the feedback.

This is a major problem.

Based on your posts it is also incorrect. The schedules I and J reflect your CURRENT situation, not some average.

You are a poster child for why the petitioner MUST review his schedules before signing the petition. I hope all works out for you.

[Llelxon]

We had the same problem....our attorney did not seem to worried about showing a positive DMI, well the UST filed a presumption of abuse. I know most people on here tell you to trust your attorney, which by and large is probably good advice, but they aren't all perfect.

You MUST show a DMI of around 180.00 and something or less or they will almost certainly put you in a chapter 13. We amended ours and I divided things like driveway maintenance, medical for the whole year, etc and divided that out. If you really look at where your money has gone over the years I'm sure you can find ways to increase your expenses. I didn't get hung up on expenses for only the past 6 months and I don't think you really should. If you are struggling financially you have probably been putting off some car or home repairs just trying to make it by. You need to figure that money into your expenses.

Anyway that is my .02 after going through a similiar because I was not well enough informed prior to filing.

[Penny Less]

OhioFiler - Thanks - I had read it I just didn't really understand what I was putting down and the attorney wasn't much help. He lost most of my paperwork too so I was really out of energy fishing for stuff by the time that schedule came up and I blew it.

Llelxon - thanks my dental alone last year / 12 sinks me way under. And I can prove it will be recurring - living near poverty level for most of my life meant no dental visits etc, once I had that job getting crowns and cavities filled was priority #1. I just had to cancel a dental appt because I lost a project bid...

Thanks all of you I'll let you know how this works out.