qualify for chapter 7 means test

[mcB]

I am underwater on my primary house & am preparing for foreclosure & BK. According to the chapter 7 means test, I have $1000 in disposable income at the end of the month. I owe $70K on HELOC & am trying to negotiate a settlement of 20% ($14K). If they don't agree to settle, my chapter 13 payment plan will allow 60 payments of $1000, total of $60K. This in addition to lawyers fees makes the chapter 13 not so favorable. I would like to qualify for chapter 7 and let go of the house and HELOC debt. Can I contribute $12k total to charity (about 18% of yearly gross income) and knock down my monthly disposable income to $0? And therefore, qualify to file chapter 7?

If this sounds too crazy are there other avenues to lower monthly disposable income?

[justbroke]

Can I contribute $12k total to charity (about 18% of yearly gross income) and knock down my monthly disposable income to $0? And therefore, qualify to file chapter 7?

No. First, Charitable contributions need to be well documented (been happening for a while) and continuing. Also, Charitable contributions cannot exceed 15% of your gross income. Again, it will surely be questioned if you're not

That means that even if you could get the 15% allowed, which I highly doubt it, that would leave the other 3% (18%-15%) tehre which is about $2K a year or $167/month. I'm sure you have other DMI that would push you over. Also, if 18% of your gross income is $12K, we're talking an annual salary over $60K. I don't know if you're single, but if you are, that would probably exceed the median income in most States. You would be subjected to a lot of scrutiny.

If we were talking $100-200 then there would be some things you could do but not when the delta is $1,000/month.

I would like to qualify for chapter 7 and let go of the house and HELOC debt.

Surrendering your home would also free up more money, meaning you really don't qualify for a Chapter 7. You may just have to face the fact that you are not the type of debtor that Congress wanted to enjoy a Chapter 7 discharge.