Means Test Tricks

[jmanford]

Does anyone know of any? I want to be honest but am I missing something? my DPI is at 202. I just need to shave off a few more dollars.

[BrokeOR]

Are you a smoker? Only situation I know of where an addiction can be a good thing. Do you have pets?

[jmanford]

I do have pets.

[justbroke]

The types of deductions being recommended will not fly in every District. Many Districts will not allow you to include things in your budget that are not legally required, or are done voluntarily (even an addiction, as you could get treatment... they'll say).

I don't like to use the word "tricks" because it means you are being dishonest. You should ask for "additional expense items" to help lower your disposable income. Right now, your disposable income is too high. It may even be too high if it were under $182.50 (and over $109.58) because there's another test to be done.

It is preferable to have your DMI under $109.58 and not by using "borderline" or questionable expenses, unless you're under the median. The reason is, that the UST will be looking for these things if your case triggers a thorough UST inspection. I prefer that people have defensible budget items rather than nit-picking to get to $109 (or below $182.50).

Things you could have left out include personal services (hair cuts, etc), household products (cleaners, etc), home repair, motor vehicle registration fees and other costs (repairs), internet, cable, cellular phones, etc.

[BrokeOR]

There is a pet allowance for food, so don't forget that in addition to JustBroke's excellent suggestions. Also, don't forget about life insurance which is an allowable monthly expense. If you do not have any, it's a good idea to check into term policies. Good way to protect yourself/family down the road.

[jmanford]

"there's another test to be done"

What do you mean?

[BrokeOR]

There is a good thread on this forum-last Sticky under Chapter 7-that has some links that might help you.

[jmanford]

thank you. I didn't see 'Pet Allowance' on the means test. What box would that go into? IRS Food and Clothing deductions are in box 19A. I'm assuming they aren't including pet food? or are they?

[BrokeOR]

Whoops-can't help you with that, as I'm not there. But, before I signed with my attorney, I had a lot of questions about allowable expenses and pets were mentioned.

Do you have life insurance? Check into it, if not.

[tigergem]

Well I buy my dog food when I buy groceries, so I just lumped all what I normally spend at the grocery store into one amount for groceries. That exceeded the allowance for one person for that category, but besides dog food it also included stuff that is in other categories, like personal care, laundry stuff, household cleaning supplies, that kind of stuff. And nobody questioned it at all.

[justbroke]

"there's another test to be done"

If your expenses are over $109.58 but less than $182.50, you need to pass another section of the Means Test. This part of the test checks to see if your disposable income multiplied by 60, is less than 25% of all your unsecured debt.

So even if you got your disposable income below $182.50. Here's an example. You lower your disposable income to $150/month. Multiplied by 60, that's $9,000 over 5 years. If your unsecured debt is less than $36,000 (25% of which is $9,000), then you are presumed to be abusing the Chapter 7 bankruptcy discharge rules because you could provide a "meaningful" dividend to your unsecured creditors in a Chapter 13.

If you have more than about $43,800 ($182.50 x 60 x 4) in unsecured debt, then you would never be able to overcome this presumption of abuse even if your disposable income was $110/month.

[backtoschool]

Make sure you took all of these expenses:

1. Home, car, health, life, dental, insurance.

2. Medication, over the counter medication, eye glasses, vitamins, etc.

3. Any haircare or personal grooming products.

4. Any vehicle registration fees, monthly parking fees, E-Z pass payments, toll fees.

E-Z pass and parking fees alone could give you $50 a month in most districts. Antacids and aspirin for your bankruptcy induced stress could also be another $20-30 dollars a month.

[iv65536]

One way I think might have merit would be to figure in the increase in taxes from the expiration of the 2001 tax bill and 2009 stimulus bill. For a couple filing jointly, this should knock over $100/mo off the DMI - and this is just what taxes provide FROM EXISTING LAW. If you have a second mortgage that is totally unsecured, I would look into refiguring your tax return without the deduction from the interest on the second, and factor in the difference as well.

So yeah, I would consider the tax laws useful here.