Advice Please. Over-median in Ohio and will be 2nd time around

[BrokeToo]

As many have already stated, I wish I had utilized this forum MUCH, MUCH sooner........

Let me explain my situation. I am over median in Ohio by roughly $5,000. I filed BK7 in October 2009 and passed the means test, but only because I had two leased cars at the same time. This was only because I leased a new car a month before filing at the suggestion of my attorney, since I would be turning in the older lease (was due up in March of this year), and needed reliable transportation. Long story short, the UST ended up agreeing to Dismiss my case WITHOUT Prejudice (meaning I am free to file at anytime without restriction), because of the fact that I had a second, ancillary vehicle that was eating up a nice big chunk of expense allowance for me. Without that they wanted to obviously push me into a Chapter 13.

So now forward to the near future - I will be filing BK7 either at the beginning of June or July (I HAVE to do it at the beginning of either of those months, because in July I will have 3 paychecks that month and it will increase my 6 month look back of income if I file at the beginning of August, so clearly not an option).
Indirectly helping my cause, I have since moved to a different county who's housing & utilities expense allowance increases (by IRS standards), an additional $356/month. Also, I have added/increased some of my expenses (within acceptable ranges of course) to aide for this to be positive the next time around. As of right now, once those expenses have been established through May, my calculations show me passing the meas test, but by very little.

Here are two things that I am really mulling over. I have a baby due with my fiancee in mid-July (reference my 6 month look back of income). We do not live together, but I will be listed as the father on the Birth Certificate and will obviously need to provide support. How do I communicate that to advise to the Trustee/Court that I will soon have an additional expense for childcare? I've read where USTs will argue that unless there is a court order this is not allowed as an expense. I am prepared to fight that, bc it is federal law to provide child support....If I have to I would have my fiancee produce an affidavit to affirm the expense. Anyways, my main question is how do I communicate this at the beginning of my case...do I need to prepare a statement with my filing? My attorney's view of it is that they will not even consider this as an expense until the baby is born. Ideas/Suggestions?

Second thing I am mulling over, since I have car lease, I obviously have no vehicle exemption to claim. I have been thinking about buying a $1000 motorcycle to eat part of my tax refund to exempt it by using my vehicle exemption. Would this be viewed as a luxury or am I risking anything by trying to claim this as an exemption? This would allow me to claim an additional transportation operation expense, which would put me a few hundred negative on the means test as well as Schedule J.

I know that since I have already been through the process, being over-median, AND being Dismissed w/o Prejudice, that I am highly likely to be looked at and scrutinized, but I really need a Chapter 7 with a family in the very near future. I appreciate any recommendations, suggestions, or thoughts! Thank you!!!

[BrokeToo]

Hoping for something positive from some of the BK Forum Gurus.....

[justbroke]

I have a baby due with my fiancee in mid-July (reference my 6 month look back of income). We do not live together, but I will be listed as the father on the Birth Certificate and will obviously need to provide support. How do I communicate that to advise to the Trustee/Court that I will soon have an additional expense for childcare?

Until the child is born and a court order compels you to pay for support, there is nothing that you're liable for at the present time. This is just how these things work. They don't "really" consider things in the future. Besides, your fiance may never marry you and may actually never seek an order of support. It's a losing proposition to say that you are compelled to pay. Right now, there is nothing compelling you.

Would this be viewed as a luxury or am I risking anything by trying to claim this as an exemption?

May Districts don't like motorcycles unless it's your only and/or primary vehicle. Many District don't allow two vehicles for one debtor (although there are a minority of Districts that allow 2 vehicles for a single debtor).

I don't think you're going to get any additional scrutiny. It's all a numbers game.

[helpmeout]

Until there is a court order in place, you are not legally obligated to pay any support at all. And if the baby does not live with you, you do not get to claim the baby as a dependent.

[SMinGA]

About waiting... If you file in early July then the look back months are Jan-Jun. If you have 3 checks in Jul, you had 3 checks in Jan also. So filing in early Aug would be a look back of Feb-Jul and you'd still have 1 month with 3 checks. Except it would be July instead of January.

*Unless your payroll ran a special 12-31-09 check instead of the usual 1-1-10 check. Then your last 3 check month was Dec 09 instead of Jan 10. But I'm thinking that is not so, since you're also considering filing in early June which would use Dec-May and you'd have a 3 check month in that look back no matter when the holiday check run hit. If you had 3 checks in Dec. and NOT Jan then you'd not consider filing in June...

[BrokeToo]

sMinGa, excellent point, I never even considered that...I guess it's one of those things that I overlooked due the constant anxiety of feeling the need to file ASAP, since I know it will not be too long before attempts to sue-to-collect come in....I estimate those will begin either during April or May. My strategy would obviously be to file an answer to avoid default judgement.

Waiting until August actually helps out because due to the extra third month with 3 paychecks in 2010 this slightly lowers my paychecks (that's how close I am to NOT passing the means test).

QUESTION: if I wait until August to file and the baby is born, but not married or living together, am I able to claim ANY extra expenses? The baby will be on my insurance, so that almost has to help me. But what about Food, etc..., without a a child support order or full custody of the child, it sounds like I wont' be able to play that card. But clearly I would have expenses for food and care. I think it's silly that the BK Court requires you to have a court order for child support when it is a recognized Federal Law. Basically they are saying, "don't pay for your child and break a Federal Law".

I read an interesting article yesterday that gave a hypothetical scenario where if a debtor that had filed bankruptcy, had a UST reject the child care expense due to no child support court order, but then the debtor was put to trial for child support any time in the future, that the UST could be called as a witness to testify for instructing the debtor that this was not an expense, thus putting the UST on the block for advising to break the law. Isn't it funny how courts do not agree?! NO, IT'S NOT! IT'S SAD!

[SMinGA]

I don't know how long it takes to get some sort of legal support/custody arrangement/visitation rights order thru the 'system'. It would not be a bad idea for you & your girlfriend to find out what is required to get that started. Not only to help on your BK case, but to do the 'right thing' for your child and protect your rights down the road...

My brother in law pays child support (payroll deducted) but has no rights to see his son, who is now 11... Hindsight is 20-20 as they say. (He married my sister 7 years ago.)

[BrokeToo]

We are getting married in Spring of next year, so I don't want to necessarily have to go through the court system (takes 3 plus months from my research), for something that I won't need...that's just extra time and money I do not have. That should be treated as a last resort in my eyes (as in if I really didn't provide any support and she wanted to take legal action).

Such a gray area on that subject. IMO, the court should allow it for my BK in the best interest of the child....backed by Federal Law.

[BCA2009]

We are getting married in Spring of next year, so I don't want to necessarily have to go through the court system (takes 3 plus months from my research), for something that I won't need...that's just extra time and money I do not have. That should be treated as a last resort in my eyes (as in if I really didn't provide any support and she wanted to take legal action).

Such a gray area on that subject. IMO, the court should allow it for my BK in the best interest of the child....backed by Federal Law.

What is your fiance's credit and income situation like? Are you waiting to get married to preserve her credit? If not have you considered getting married now to increase your allowances to a family of three?

[BrokeToo]

My fiancee's credit is excellent. Her income is under median by roughly $11,000, but filing as a family of 3, both incomes would put us in excess over median.

We are waiting to get married until my financial issues are resolved. This has put a lot of unneeded stress on her as well, but she has stuck by my side this entire time, for which I am eternally thankful.

Just some background, I had two ankle surgeries a few years ago that left me with balances of over $28,000 (now in Attorney General Collections). Only $4,000 credit card debt. Also, now have an additional debt of over $15,000 due to the deficiency from the lease that was due up in March, which I voluntarily surrendered because I could not afford to pay for both cars (which I would never have got the new lease knowing my case would be dismissed).

I have not used a credit card for at least four years, so it's not a question of if I know how to live within my means based on what i can actually afford. This has strictly turned into a decision for me to have the ability to take care of my little baby and future wife...... a fresh start...as they like to say.

[helpmeout]

QUESTION: if I wait until August to file and the baby is born, but not married or living together, am I able to claim ANY extra expenses? The baby will be on my insurance, so that almost has to help me. But what about Food, etc..., without a a child support order or full custody of the child, it sounds like I wont' be able to play that card. But clearly I would have expenses for food and care. I think it's silly that the BK Court requires you to have a court order for child support when it is a recognized Federal Law. Basically they are saying, "don't pay for your child and break a Federal Law".

I read an interesting article yesterday that gave a hypothetical scenario where if a debtor that had filed bankruptcy, had a UST reject the child care expense due to no child support court order, but then the debtor was put to trial for child support any time in the future, that the UST could be called as a witness to testify for instructing the debtor that this was not an expense, thus putting the UST on the block for advising to break the law. Isn't it funny how courts do not agree?! NO, IT'S NOT! IT'S SAD!

I think that you are a little confused about child support and the federal law.

The federal law only applies when there is a court order in place. It does not apply if there is no court order in place.

If the mother and the baby lived with you, there would be no question about being able to use childcare as an expense or both of them as dependents.

The UST isn't breaking any laws as there is no court order in place. If there was, the expense would be allowed.

[helpmeout]

We are getting married in Spring of next year, so I don't want to necessarily have to go through the court system (takes 3 plus months from my research), for something that I won't need...that's just extra time and money I do not have. That should be treated as a last resort in my eyes (as in if I really didn't provide any support and she wanted to take legal action).

Such a gray area on that subject. IMO, the court should allow it for my BK in the best interest of the child....backed by Federal Law.

It does not take 3 months if both parties agree. In fact, if both parties agree to what is in the court order, it will be given priority. You can have the paperwork ready for when the baby is born. Complete with signatures.

[BrokeToo]

I am really confused or maybe is it just frustration! How is it not possible to claim any additional/childcare expense, regardless of whether there is a court order or not. From my take on it, the court essentially wants your own family to have a court order (which means they are really suing you for a judgement, but calling it something different), to be able to claim support. That is just absurd! Even more so when you can consider donating to charity for up to 15% of your gross income. Allowing that, but not allowing contribution to your own child without a court order is just plain wrong. Where has the common sense gone in this world? That is not rocket science. The Trustees have way too much subjective power.....they really will do ANYTHING to make a buck. There has got to be a way to fight this.

I doubt I even wait until our baby is born to file, so this will probably not even be something I will get to put up an honest fight for, but this just burns me. It is completely irresponsible of the court and trustees to allow denial of this.

[justbroke]

I am really confused or maybe is it just frustration! How is it not possible to claim any additional/childcare expense, regardless of whether there is a court order or not. From my take on it, the court essentially wants your own family to have a court order (which means they are really suing you, but calling it something different), to be able to claim support.

It's not your take. it's what is your legal (or court ordered) responsibility. This is because you live apart. If you were married and occupying the same home, that's another story.

All of your statements are in the future. A Court is not allowed to "divine" the future, only what's before them. It is quite obvious, based on years and years of precedence and actual juris prudence, that a non-resident non-custodial parent without any order of the court to pay child support, doesn't pay. Even if they did pay, it's occasional and not at the rate a court would order. Go to any child support hearing and hear the non-custodial parent talk about "I buy diapers, once in a while". That's not support.

Responsibility starts with you. First, have the child. Second, have your name on the birth certificate. Third, if required by your jurisdiction, declare parentage. Fourth, file with the family court for an order of child support for both parents! Then you are legally responsible.

Many non-custodial non-resident parents live their lives without ever paying or even being held accountable for paying child support. Why should the court allow you to just say "I'll pay" when you are not compelled to do so.

(Recent Florida law now has codified that a non-resident non-custodial parent who is served with an order for child support, can't be responsible for more than 2 years of "back" support. There's a reason for that.)

[helpmeout]

I am really confused or maybe is it just frustration! How is it not possible to claim any additional/childcare expense, regardless of whether there is a court order or not. From my take on it, the court essentially wants your own family to have a court order (which means they are really suing you, but calling it something different), to be able to claim support. That is just absurd! Even more so when you can consider donating to charity for up to 15% of your gross income. Allowing that, but not allowing contribution to your own child without a court order is just plain wrong. Where has the common sense gone in this world? That is not rocket science. The Trustees have way too much subjective power.....they really will do ANYTHING to make a buck. There has got to be a way to fight this.

I doubt I even wait until our baby is born to file, so this will probably not even be something I will get to put up an honest fight for, but this just burns me. It is just completely irresponsible of the court and trustees to allow denial of this.

The Trustee is not being subjective. S/he is simply going by the facts. Here they are:

1. You weren't married at the time of birth. Which means that the only proven parent is the mother.
2. You aren't living with the mother or the child. Again, the mother is the only proven parent as she was the one who gave birth. You could just be claiming the child as yours to be able to file a Chapter 7 BK (not saying that you are, just saying how a Trustee could view it. It's their job to scrutinize a BK petition).
3. You are under no legal obligation, Federal or otherwise, to pay child support without a court order. Again, the mother is the only proven parent. Since you won't be married at the time of birth, you don't have the legal presumption of paternity like a married couple has.

It would be irresponsible of the Trustee and court to allow an expense when you are not the proven father, either by marriage or a paternity test with a court order ordering child support. Now, if you were court ordered to pay child support, that would be given a priority per Federal Law. But you aren't.