Ohhh NOOOO!!!

[coolmom04]

"The Bankruptcy Administrator has reviewed all materials provided by the debtor(s) and has determined that the case should be presumed to be an abuse under section 707(b). The Bankruptcy Administrator requests that the clerk issue notice of presumed abuse. (Kirk, Christopher) (Entered: 05/03/2010)"



NOW WHAT?? The attorney hasn't called. I'll call them tomorrow. He said they'd fight if this happened... but dang. We're over the median by about 2K and that's it. This is so not cool

I'm scared.

[blockhead]

It can't be that you're over the median. They must be finding fault with some of your expenses.

[coolmom04]

It can't be that you're over the median. They must be finding fault with some of your expenses.

I think I just figured out what it might be. On the means test, they fixed the taxes to reflect what we SHOULD have been paying rather than what we were paying b/c we were paying about $200/month too much. It was fine on the means test... we still passed no problem. We had a negative DMI of about $300. BUT - they didn't reflect the change on schedule I or J! Which means they think we have an extra $200/month, but we don't. I know we can easily add $200 expenses.

It doesn't help that my mom lives with us and we support her financially 100%, which accounts for about $400/month in medical insurance alone. But, she's elderly and has very high medical needs, so the attorney didn't see a problem with it at all.

I hate freaking out.

[BKDefender]

Financially supporting your dependent elderly mother is no different than financially supporting your dependent 16 year old, so the expenses are allowable.

If you were paying too much in income taxes each month than you are required to pay, then that's a reason to object - it's money that is going into a savings account that you retrieve at the end of the chapter 7 bankruptcy instead of paying it to your creditors during a chapter 13.

If you could do it over again, I would recommend that you stop overpaying income taxes and start contributing to a pre-tax savings IRA for that $200/month for a few months before filing bankruptcy.

--William

[coolmom04]

Financially supporting your dependent elderly mother is no different than financially supporting your dependent 16 year old, so the expenses are allowable.

If you were paying too much in income taxes each month than you are required to pay, then that's a reason to object - it's money that is going into a savings account that you retrieve at the end of the chapter 7 bankruptcy instead of paying it to your creditors during a chapter 13.

If you could do it over again, I would recommend that you stop overpaying income taxes and start contributing to a pre-tax savings IRA for that $200/month for a few months before filing bankruptcy.

--William

Thanks William. We did fix the taxes already. Are you saying we won't get a chance to fight back? Is it over?

[coolmom04]

I guess I'm just trying to find out if we have a chance to fight it. I am trying to find out if we can... but I keep reading about subsections of 707(b) and I don't know about any other subsections. I am just really hoping we can fight it.

I guess I just don't get it. We easily pay that extra $200/month for groceries and clothes.. more than we wrote down to begin with, but it seems like the BA would then question why we were increasing the expenses after the fact. If they dismiss, we won't qualify to file later b/c I just landed a job. Hopefully if they dismiss, we can get the creditors to settle with us, but somehow I doubt that's going to happen.

[BKDefender]

If you filed an amended means test and with the taxes corrected you are still within the amount allowed to file Chapter 7 then you should be good.

--William

[coolmom04]

If you filed an amended means test and with the taxes corrected you are still within the amount allowed to file Chapter 7 then you should be good.

--William

But the means test is already correct. I'm so confused. I'm sorry. My brain isn't working. On the means test, the taxes paid was made to reflect the amount of taxes we SHOULD have been paying - so it was changed from $1379 to $1087.. this was before we filed.

So, on schedule I, they based the info straight from the pay stubs and didn't change anything based on the taxes situation. Which in turn means they didn't fix it on Schedule J...

Does that make sense? I can't tell if I am saying it correctly.

[jdcat]

Can they do that though? Fix the taxes on schedule I if you are not actually paying less each pay period? I thought schedule I had to be actual.

[coolmom04]

I dunno... I just can't figure out what else could be the problem. I know stressing about it isn't going to do any good but I know I won't be able to sleep tonight and won't rest until I talk to someone at the attorney's office tomorrow.

[coolmom04]

Here's what our schedule J is ( family of 7 in NC - four kids ages 7, 3, 2, 1 )

1. 1479.31 (mortgage)
2. a. 300 (electricity & gas)
b. 50 (water/sewer)
c. 0
d. 195 (cable, internet, and three cell phones)
3. 150 (home maintenance)
4. 1200 (food)
5. 200 (clothes)
6. 50 (laundry)
7. 100 (medical and dental expenses for us)
8. 450 (transportation)
9. 200 (recreation/entertainment)
10. 0
11. b. 45 (life insurance)
d. 130 (auto insurance)
17. 1137 (preschool, baby care, wife's life insurance, wife's debt payments, MIL's health insurance, MIL's medical expenses, personal care)
18. 5686.21 (average monthly expenses)
20. a. 5781.05
c. $94.74 (Monthly net income)

On a side note... we were made an asset case at the 341 and told to make the TT an offer for the stocks... maybe we offended him with our low ball offer lol

[SMinGA]

Red flags I see:

$200 is high for entertainment, $1200 may be high for food. (I have not double checked the #s for a family of 7 though.)

And then this:
17. 1137 (preschool, baby care, wife's life insurance, wife's debt payments, MIL's health insurance, MIL's medical expenses, personal care)

If I remember correctly from your prior posts, your husband filed alone. If so I don't think he can claim the debts of the non-filing spouse (you) as an expense. And it doesn't seem right for him to claim your personal expenses. Also, does your mom receive any social security or other income? If so, that income should be included so much as it contributes to household income. Any of her individual expenses - and the income that covers them - should not be included.

[SMinGA]

Ps-I'm confused about one thing. The schedule J figures you posted - is the $94 positive DMI with the correct or the incorrect tax withholding?

[coolmom04]

It's without the correct tax withholding.. and that's the problem I am sure. The attorney said we could claim my expenses b/c when we filed, I was unemployed and my mom (his MIL) has absolutely zero income.

[SMinGA]

So you had +$94 but with the correct withholding its +$386. Plenty for a ch. 13... Why not just convert? From the #s you listed, it seems you should be able to handle this. Especially since you now have an income of your own to cover your own debts.

On claiming your debt payments as expense: the attorney probably knows best, so my logic is irrelevant! It just strikes me as a way to make sure one spouse can do a ch. 7 (because there really is disposable income, but one needs more expenses to use it up) then allow the other to file a ch. 7 a few months later. Seems a bit like the spirit of the 'ch 20' of the pre-2005 era where someone would strategically file ch. 7 to discharge unsecured debt and then file ch. 13 when it discharged to cure mortgage arrears.

It's without the correct tax withholding.. and that's the problem I am sure. The attorney said we could claim my expenses b/c when we filed, I was unemployed and my mom (his MIL) has absolutely zero income.