Means Test Close, Don't Know What To Do, Please Help

[zero]

Any insight is appreciated...

I started the means test process with a highly recommended attorney who is supposedly one of the top three bk attorneys in the state. After a month of going back and forth (that could have been accomplished in two days), the attorney says the means test is close.

He said in order to get the test to work, he had to run several iterations. As it stands now, I pass the test, but if scrutinized closely, they may disallow some of my income exemptions and possibly disqualify me from a chapter 7.

Upon hearing this, I asked what is the bottom line. What are the odds of such scrutiny and what happens if they disallow and fail me. He gave me 60/40 odds that it would go through without a problem and went on to say if they denied the test, I would either have to dismiss or convert to 13.

Now I am very discouraged and totally confused as to what I should do.

Anyone have or encounter a similar situation? Anyone have any insight or advice? I do have the draft of the test if that will be helpful.

Thank you in advance.

[justbroke]

Anyone have or encounter a similar situation? Anyone have any insight or advice? I do have the draft of the test if that will be helpful.

THis happens all the time, except that I'm thinking that you're over the median income for your State. Being over the median, is what peaks the United States Trustee's (UST's) "interest" in a case. This makes them look MUCH more closely at your expenses. if you have questionable expenses, they will attack them, so as to dismiss your case or push you into a Chapter 13. That's the UST's job.

I think your attorney is saying that he stretched it as far as he can. That there are expenses on your Schedule J that may be questioned. That if the UST pushed too much, some of the expenses could be curtailed or removed. That you're so close to having too much disposable income, that any challenge to your expenses could be fatal.

This happens in a lot of over-the-median cases, so it's nothing new. Your odds are better than 50/50. So think of that as the bright side. It's up to you, but since you've already paid and dismissing really just throws you to the sharks (creditors), just go forward.

Worse case... dismissal or conversion to Chapter 13.

[bobbyquefour]

I agree. It is the whole over the median thing...that is what really gets the UST's wheels spinning apparently.

But even though you don't want a chapter 13 (nobody does) it is probably better than the situation you are in. It sounds like your attorney is being very honest with you.

[zero]

Thanks for the info.

I'm filing soley but am married. My wife's income alone puts us over the median. I'm still collecting a very small unemployment benefit.

justbroke, it's uncanny. When you said this,

I think your attorney is saying that he stretched it as far as he can. That there are expenses on your Schedule J that may be questioned. That if the UST pushed too much, some of the expenses could be curtailed or removed. That you're so close to having too much disposable income, that any challenge to your expenses could be fatal.

... it was like you were listening in on our conversation.

I have paid his means test fee but he wants another $2,500 for the filing, plus the Bk fee. This is a tough call, I really don't which way I should go.

Also, how are these red flags picked up? At the Trustee meeting? Prior to or after that. Do they use thumb screws?

I'd appreciate more food for thought, so if anyone has some, please don't hold back.

[zero]

Another question. If they question and disallow an expense, and I find other expenses that weren't included in the original means test, would they allow me to use those newly found and completely documented expenses?

[justbroke]

Also, how are these red flags picked up? At the Trustee meeting? Prior to or after that. Do they use thumb screws?

They are not really red flags, but thresholds or indicators. It is not the "panel" Trustee who deals with this. The "panel" Trustee is the person that runs the 341 Meeting.

There's a person known as the United States Trustee (UST) who oversees your entire bankruptcy from a case perspective. The UST is the one who would challenge you on the values. It's their job. The UST may show up at your 341 Meeting to ask some questions. You will usually know if the UST is "interested" in your case either before or at the 341 Meeting. The UST doesnt' torture you... no waterboarding!

I say... go for it. What's the worst that could happen? You could spend the $2,500 on creditors but why not, perhaps, be able to discharge the debt. Besides, it sounds like your case hasn't been thoroughly reviewed since you haven't paid the entire fee yet. Your attorney may change his guess to 80/20 after getting deeper into your case specifics.

(As to "new" expenses, yes, you could claim them if they were "missed".)

[zero]

justbroke, thank you so much.