highest income and Ch7

[daytona]

What is the highest income anyone has been able to squeze into a CH7? Obviously looking for people who failed the income test but were able to qualify with expenses.

[bk2010]

we passed it, only because of the additional expenses from our mortgage and medical.. let me tell you... we were 2 people, and my husband works straight commision and is our only current income as I left my job in august and have suffered several pregnancy losses since.. income was at 6700 per month in Texas.. we live in Cypress, col is a bit higher that most places...

we qualified, but let me tell you... when we went to court, we got reemed by a rep from the US trustees office who came just for us, I could only begin to tell you the comments and we were completely blown away by the how insensitive she was regarding everything.. she was totally out of line.. but regardless, after 15 minutes of drilling, we went about our lives, and 60 days ends the 15th..

so, just be prepared if you are on the border, I guess they like the idea of making an example out of someone... good luck! I definitely stressed WAY too much over it, all in all despite that, it was smooth and as easy as it could be so far!

best wishes!

[blockhead]

what is the highest income anyone has been able to squeze into a ch7? Obviously looking for people who failed the income test but were able to qualify with expenses.

120k

[UWFan]

I am sitting at around 14k right now in average income per month for the last 6 months and I think that from what I have told I can qualify for a 7 because of my secured debts on real property. I haven't filed yet though. Planning on doing so in about a month, but everything seems to be in order and I have consulted multiple attorneys. I am expected to be drilled by the trustee.

Our avg income was more than double what it is now before economy fell apart so we had some pretty hefty mortgage payments... About 10k total for 2 houses that really helps offset our current income. I would be very nervous about high income being offset by extraordinary expenses unless those expenses are for secured property. Just my 2 cents.

[coolmom04]

92K but a family of 7 we're about 4K over the median

[DeadManCrawling]

115k or so.

Our mortgage, maintenance, utilities, insurance and hoa totaled $7,500/month.

We were able to use these expenses and were not questioned. No challenge from the UST.

Florida Middle District.

Good luck to you

[HHM]

I am not sure this thread serves much purpose. As the amount of income, itself, is irrelevant to passing the mean test.

Theoretically, you can earn $1,000,000+ per year, but if you have 51% non-consumer debt, you get a chapter 7.

The only way to pass the means test with high income is to have high "secured" debt payments (i.e. mortgage), or have extraordinary, necessary expenses (i.e. $2,000 in medical each month). Otherwise, about 80% of those that are over median, will be chapter 13.'s.

[daytona]

HHM..that is true to a point...my understanding is they can still force you to "give up" secured debts (like a Luxury mortgage) and hence go into a chapter 13.. I'm just curious as to peoples experiences with high incomes and actually getting A CH7 confirmed.

[UWFan]

daytona... I don't know how common this is, but here is one case in California where it was ruled that the trustee can't knock the mortgage payment down and that mortgage was about 6k I think, which is about the same as mine for my primary residence.

http://www.bkforum.com/showthread.php?mode=hybrid&t=33922

I was however looking at some docs in pacer today and I stumbled across a guy living close to me that had a $7400 mortgage payment and the UST filed to dismiss based on abuse and knocking the payment down to about $2500. I am guessing the trustee was saying he could live in a cheaper house and have some disposable income to pay back unsecured creditors with. The debtor challenged that and ultimately the trustee's motion to dismiss was denied. In the same case the UST tried to chop a car lease payment from 850 to 450. I am extremely nervous that the trustee is going to come along and try to cut our secured debt payments down... Just houses plus my one car is about 11.5k in secured debt payments monthly. Using those payments we should be able to qualify, but if somehow the trustee successfully reduces them I would be in a world of hurt.

Anybody else have any input here? Have trustees successfully been able to reduce the deductions for secured debt? I cited two cases where the trustee tried and failed, but I am curious if they have actually been successful in doing so. I am planning on giving back both houses and the car if that makes a difference. My attorney seems to think everything will be fine, but it's my ass here and not hers so I am nervous.

[keepmine]

I am not sure this thread serves much purpose. As the amount of income, itself, is irrelevant to passing the mean test.

Theoretically, you can earn $1,000,000+ per year, but if you have 51% non-consumer debt, you get a chapter 7.

The only way to pass the means test with high income is to have high "secured" debt payments (i.e. mortgage), or have extraordinary, necessary expenses (i.e. $2,000 in medical each month). Otherwise, about 80% of those that are over median, will be chapter 13.'s.

Just to clarify-if the debt is primarily nonconsumer, do you still get a Chapter 7 discharge regardless if your schedules show MDI to fund a 13?
Sorry to go off topic on this thread-just curious.

[blockhead]

If it makes you feel any better (I'm in circuit 1), the UST audited my case and said nothing about the high mortgage, taxes and insurance bill that made Ch7 work for me. I was up to date on payments and indicated I was going to keep the property (without reaffirming).

[daytona]

keepmine those are some interesting cases. My sitiuation is pretty complicated from an income standpoint, but If the mortgage can stay I easily qualify for a CH7.

[HHM]

Just to clarify-if the debt is primarily nonconsumer, do you still get a Chapter 7 discharge regardless if your schedules show MDI to fund a 13?
Sorry to go off topic on this thread-just curious.

Yes.

First, realize that in non-consumer cases, you don't even fill out the means test except for checking the primarily non-consumer debt box. I have seen non-consumer cases where, on schedule I&J, they have $2,500 MDI, $4,000 DMI, etc, and not a peep for the UST. In a non-consumer case, disposable income is a non-issue.

As for mortgage debt and so forth, there probably is an upper limit on what is acceptable. Also, strictly speaking, if you have a $7,500 mortgage payment, you SHOULD be looking for cheaper housing. But, on the means test, it does allow you take your secured debt payments (i.e. mortgages). But, you may still get an objection on the totality of circumstances.

[momofthree]

Well, the real housewives of New Jersey star (Teresa Giudice) filed last October ('09) for ch.7. The income listed on their schedule I is over $16k per month, and they listed their mortgage on their schedule J with a payment of over $12k per month.

I did read somewhere though that they are planning to sell the house, who knows if that's true or not though...

[myid4u2c]

Yes.

First, realize that in non-consumer cases, you don't even fill out the means test except for checking the primarily non-consumer debt box. I have seen non-consumer cases where, on schedule I&J, they have $2,500 MDI, $4,000 DMI, etc, and not a peep for the UST. In a non-consumer case, disposable income is a non-issue.
.

Based on my non-consumer case and my attny this is not totally true, while you are correct that the means test is not required, you still have to submit your budget. The IRS limits that the normal means test use do not apply. If in the end you have money left over to fund a 13 you would still be put in one. Very unlikely because your expenses are not looked at very closely and there are no limits to what you could spend, however it could happen.