Schedule J question

[badhouse]

I may or mary not wind up filling for bankruptcy, all I really want to do is get from underneath an underwater mortgage. I am trying to short sale my home but am not optimistic that the bank will agree to one. At any rate, I filled out a Schedule I and J to see how likely a Chapter 7 will work for me. At this point, I wind up with a DMI of $159.00 when I compute my actual expenses. If I use IRS allowences I wind up with a slightly negative DMI. Can I use the IRS allowances or does is have to be my actual monthly expenses?

It seems to me I should be able to use the IRS allowance. The fact that I am not spending a lot of money on clothes, medicine, or transportation doesn't necessarily mean that I don't NEED to spend more money then I do on those items. It could mean, that to the detriment of my well being, I am skipping expenditures on those things to service my debt load. That seems like a more than reasonable argument to me but the bankruptcy code is riddled with regulations that appear unreasonable. Does anyone think I can get away with using the IRS allowances?

[LimpDisc]

Your expenses should be forward looking. I don't think you'll have issues using up to the IRS standards. Our attorney used close to the IRS standards when filling out our schedules.

We did use actual expenses for cell phone, Internet, cable and charitable donations.

There are some OR filers on this forum. Hopefully some of them can tell you about their experiences.

[badhouse]

Thanks, I appreciate it.

[HakunaMatata]

My attorney beefed up my some of my expenses to align more closely with standards. It became quite obvious I had been neglecting myself to pay creditors.

[badhouse]

I talked to an attorney today and asked her this question. She said they don't really pay attention to Schedule I and J im chapter 7. That doesn't sound right to me.

[OhioFiler]

I talked to an attorney today and asked her this question. She said they don't really pay attention to Schedule I and J im chapter 7. That doesn't sound right to me.

I'd look for a new attorney if she actually said that. Those are two of the most important Schedules in your petition.

[LimpDisc]

I agree with OhioFiler. I would suggest you interview a few more attorneys.

How could they not pay attention to current income or expenditures?

[badhouse]

I agree. That makes no sense. All I can figure is that she believes I am given safe harbor in chapter 7 because I am 4K below median income. I haven't read anything to indicate that would be true but perhaps that's standard practice in District 18?

[ApresMoi]

I am in CA and was told exactly the same thing by an attorney. That trustees don't look at Schedules I and J all that much in Chapter 7s. I also got the same reaction in this forum as you are getting ("find another attorney"). After hearing that, I called up someone who fills out these forms all day long and asked about Schedules I and J and DMI in connection with a Chapter 7. At first he said a trustee probably wouldn't be too worried even if you had $200 in DMI, and then later in the conversation he backed off that a little by saying if you wanted to be absolutely safe you could make sure not to have more than $100 in DMI.

My feeling is we are over thinking this and that the attorney who advised me is probably right. I will probably have a negative DMI anyway...but since I am a worrier, I am going to make sure of that regardless of whether I am told I don't need to worry.

Another forum member weighed in on my earlier post along this same topic, and she said her attorney told her the same thing as we were told. She was also a Chapter 7, but I think was closer to the median. If you look up my statistics you can probably find that thread.

In my case, I am at about half the median.

OTE=badhouse;378829]I talked to an attorney today and asked her this question. She said they don't really pay attention to Schedule I and J im chapter 7. That doesn't sound right to me.[/QUOTE]

[liboton21]

My 341 is next week and the trustee's paralegal have some question regarding sch I and J. They were asking how come my income was reported low but when he sum it up it's high. Basically I have a 6400 monthly gross for my job but he said it should be 8000. I think they just missed my VA pension of 1K plus in item 12. Also they asked regarding my children's age. I have a $15 DMI.

[OhioFiler]

I am in CA and was told exactly the same thing by an attorney. That trustees don't look at Schedules I and J all that much in Chapter 7s. I also got the same reaction in this forum as you are getting ("find another attorney"). After hearing that, I called up someone who fills out these forms all day long and asked about Schedules I and J and DMI in connection with a Chapter 7. At first he said a trustee probably wouldn't be too worried even if you had $200 in DMI, and then later in the conversation he backed off that a little by saying if you wanted to be absolutely safe you could make sure not to have more than $100 in DMI.

My feeling is we are over thinking this and that the attorney who advised me is probably right. I will probably have a negative DMI anyway...but since I am a worrier, I am going to make sure of that regardless of whether I am told I don't need to worry.

Another forum member weighed in on my earlier post along this same topic, and she said her attorney told her the same thing as we were told. She was also a Chapter 7, but I think was closer to the median. If you look up my statistics you can probably find that thread.

In my case, I am at about half the median.

OTE=badhouse;378829]I talked to an attorney today and asked her this question. She said they don't really pay attention to Schedule I and J im chapter 7. That doesn't sound right to me.

[/QUOTE]

If these attorneys are right then why would it matter what was on the schedules at all? If they don't look at them I'd just put a bunch of made up info on them and see what happens.

[ApresMoi]

My 341 is next week and the trustee's paralegal have some question regarding sch I and J. They were asking how come my income was reported low but when he sum it up it's high. Basically I have a 6400 monthly gross for my job but he said it should be 8000. I think they just missed my VA pension of 1K plus in item 12. Also they asked regarding my children's age. I have a $15 DMI.

And you are a Chapter 7, right? You have lot more income than me. I'm at half the median. That may be why the atty told me what he did. I am not taking any chances and will have a negative DMI going in.

[liboton21]

And you are a Chapter 7, right? You have lot more income than me. I'm at half the median. That may be why the atty told me what he did. I am not taking any chances and will have a negative DMI going in.

I'm over the median by 6k family of six in SoCal but due to high mortgage and unsecured debt it prompted with to file BK7. I passed the means test.

[stratos]

Oftentimes, people aren't paying for things they really need before filing bk due to a lack of funds, so current expenditures could be very inaccurate if those people only put what they were actually spending. Different courts may look at this differently, but I think reasonable expenses (which the IRS stds would provide) should not create any issues. The instructions actually call for an estimate of average OR projected monthly expenses.

[daylate]

I think if you are over the median and have enough excess income you can lose your chapter 7 for a variety of reasons. One being Sec 707(2)b. This link has the applicable code. http://www.bbc.co.uk/go/rss/int/news/-/news/

if you are under the median income, then Sec 707 (7) prohibits the use of 707 (2) to compute whether or not you have too much dmi.

The only thing that could get you then would be 707 (3) which I believe is the infamous "totality of circumstances" whereby for some reason the US Trustee thinks you are able to pay something to your creditors. But I have yet to see where this has happened or under what circumstances it could. Hopefully someone will provide some examples.