US Trustee Interested & Getting a Job

[BKinGA]

My husband filed Chapter 7 in Jan 2010 without me because he is unemployed and had some bills he could not pay (I had previously filed a Chpt 7 last year when I was laid off from work, but was hired again by another company last June).

At my husbands initial 341 meeting the regular trustee requested our attorney to correct schedule I because my income was not stated correctly on it and to come back to court in 14 days.

The second 341 meeting was held and the trustee accepted the documents and said they would close the 341 meeting and file it on Pacer.

But our attorney also received an email from the US Trustee stating that they questioned the amount of support my husband received from my income to pay his houshold expenses. We met with our attorney, went through the household expenses again and found additional expenses that had not been indicated and today our attorney filed an amended means test. My husband still qualified by a negative $800 a month on line 50, Monthly disposable income.

My husband is trying to find a job. If he is able to find one soon, with the US Trustee watching over us is this going to be an issue with the chapter 7? Is my husband going to have to wait to be employed until after it's discharged?

He has some interviews coming up and if he gets lucky could get a job within the next week or 2. Would the US Trustee try to use that to throw it into a Chapter 13?

Your feedback is most appreciated.

[OhioFiler]

Highly unlikely.

[justbroke]

Very unlikely. A potential job, is not a job at all.

[BKinGA]

Very unlikely. A potential job, is not a job at all.

If he does get a job. What impact could that have on the Chapter 7 with the US Trustee involved?

[justbroke]

If he does get a job. What impact could that have on the Chapter 7 with the US Trustee involved?

If you are post-341 Meeting.... almost nil chance of it affecting anything. I'm not sure if you had your 341 Meeting yet, but even it your 341 Meeting is next week, and before you start any new job, I think he's okay.

The real problem comes at the 341 Meeting when the creditor asks "has your financial status changed" or "have you started working again?". The answer is... no. You don't elaborate that you're starting one next week, or you think you found a job. The fact is, you don't have a job until you're actually there, working.

[BKinGA]

If you are post-341 Meeting.... almost nil chance of it affecting anything. I'm not sure if you had your 341 Meeting yet, but even it your 341 Meeting is next week, and before you start any new job, I think he's okay.

The real problem comes at the 341 Meeting when the creditor asks "has your financial status changed" or "have you started working again?". The answer is... no. You don't elaborate that you're starting one next week, or you think you found a job. The fact is, you don't have a job until you're actually there, working.

Our attorney just called. The US Trustee wants an accounting of every penny I spend beyond the household expenses so they can add that to the amount of available income. Anyone ever heard of this?

[OhioFiler]

Our attorney just called. The US Trustee wants an accounting of every penny I spend beyond the household expenses so they can add that to the amount of available income. Anyone ever heard of this?

You are married. I would expect the total of you income and his would be used to determine totality of the circumstances.

[justbroke]

Our attorney just called. The US Trustee wants an accounting of every penny I spend beyond the household expenses so they can add that to the amount of available income. Anyone ever heard of this?

Yep! They are trying to figure out the extent to which you contribute to household expenses and that you're not hiding income that should otherwise be treated as marital income.

[BKinGA]

Yep! They are trying to figure out the extent to which you contribute to household expenses and that you're not hiding income that should otherwise be treated as marital income.

I thought that when he filed individually that only the portion I paid for his household expenses would be treated as income. Thats at least how it is listed on the means test.

[justbroke]

I thought that when he filed individually that only the portion I paid for his household expenses would be treated as income. Thats at least how it is listed on the means test.

Actually, it's not listed on the means test that way, and I'll explain in a moment.

The key to all this, in the end, is that the Trustee/UST needs PROOF that the portion that you claim to contribute is in fact the only portion that you contribute. Many debtor-spouses reduce their current monthly income by, legally, reducing the amount of the non-debtor spouses income based on what they "DO NOT" contribute to the household. The is opposite of what you're thinking.

Technically most debtors think of it as... it's what the non-debtor spouse contributes to the household, but that's not the case. The Means Test clearly shows income of BOTH spouses included, but then the portions "not contributed" to the household are deducted. I'm probably being confusing, but if you look at Form B22C line 13, you'll see that you deduct "named" expenses... not "add" shared household expenses.

For example, to deduct the non-debtor spouses "credit card" payments, on 13a. you might enter "Credit Card Payments" and enter an amount. For line 13b, you might enter "Car Payment", and so on. This is so the Trustee (and/or UST) can validate what the actual amounts that are NOT contributed to the household.

In your case, the Trustee is just wanting proof of what you spend that "non-household" money on.

[BKinGA]

There is much documentation now required by the US Trustee, including bank statements for both of us from Jan 09. What are they going for? Something that I paid for in January may not be applicable to what is being paid current day. And what happens if we cant provide in the time they want it? Some accounts are closed and it may take longer to get from the bank.

[justbroke]

They are just doing their due diligence. If you can't produce the statement, submit an affidavit that you could not obtain them from the source bank as the account is closed. Always inform the Trustee/UST if you're having trouble producing documents or adhering to their orders and requests. You want to always appear cooperative.

[BKinGA]

Actually, it's not listed on the means test that way, and I'll explain in a moment.

The key to all this, in the end, is that the Trustee/UST needs PROOF that the portion that you claim to contribute is in fact the only portion that you contribute. Many debtor-spouses reduce their current monthly income by, legally, reducing the amount of the non-debtor spouses income based on what they "DO NOT" contribute to the household. The is opposite of what you're thinking.

Technically most debtors think of it as... it's what the non-debtor spouse contributes to the household, but that's not the case. The Means Test clearly shows income of BOTH spouses included, but then the portions "not contributed" to the household are deducted. I'm probably being confusing, but if you look at Form B22C line 13, you'll see that you deduct "named" expenses... not "add" shared household expenses.

For example, to deduct the non-debtor spouses "credit card" payments, on 13a. you might enter "Credit Card Payments" and enter an amount. For line 13b, you might enter "Car Payment", and so on. This is so the Trustee (and/or UST) can validate what the actual amounts that are NOT contributed to the household.

In your case, the Trustee is just wanting proof of what you spend that "non-household" money on.

What time period should I look back at my expenses, 6 mos prior to filing or 12 mos? Neither the attorney or the US Trustee said.

[justbroke]

What time period should I look back at my expenses, 6 mos prior to filing or 12 mos? Neither the attorney or the US Trustee said.

For the Means Test, it's a 6-month lookback. For Schedule J, it's a current view with a slant towards the future.