Positive DMI Schedule I/J

[nomoneyhoney]

I've been reading other threads and some said that Chapter 7 may be converted to Chapter 13 if you have positive DMI.

Our income for family of 5 is under 15k for Median Income. However, our current monthly expenses and income have positive $447 DMI listed on schedule I/J.

We have a positive DMI because my husband has been working overtime for the past three months. And we added this to our schedule since it asked for current monthly income. However, if it weren't for the overtime, our DMI would be negative.

I'm worried that the trustee would dismiss our case and have us convert to Chapter 13 because there is no way we can afford a repayment plan especially if my husband cannot work overtime hours in the future. In addition, we have to start paying back his student loans in Spring after he graduates.

I hope they see the whole picture, not just the numbers written on Schedule I/J.

[yang0837]

Positive $447 is rather high. I've read on the forum that anything over $150 will raise red flags with the UST and most likely end up in a conversion. When I started the schedule myself, I ended up with a positive DMI also ($200). However, after I met with my attorney and he reviewed everything, he pointed out things that I miscalculated and it dropped into the red (-$250). There were things that I didn't think to include or undervalued, like clothing, grooming, medical and dental, and transportation. These were expenses that I didn't regularly incur month to month but purchased or paid throughout the year, and so I had to add everything up then divide the totals by 12 to get an accurate monthly amount instead of guessing.

I also had significant overtime that I worked sporadically throughout the year, so again, my attorney asked me to recalculate it by adding up the hours and dividing by 36 (paid biweekly) to get the additional amount to add to my income in case my paychecks were questioned for being a bit over or under the amount stated. He also included a note about why the amount of overtime changed (work in IT, so I'm usually on call and due to bad economy/wage freezes, am not salaried but paid overtime for hours worked while on call).

[nomoneyhoney]

Our 341 meeting is in three weeks. Can we do an amendment before or should we wait until the trustee says something about it. It clearly shows that the overtime hours made us have a positive DMI. If it weren't for that then we would be -550.
If in case he wants us to convert to Chapter 13, can we object to that to see what the judge would say?
Not really sure of how the whole process.

Thank you for your help.

[tcreegan]

average income over year

Hello nomoneyhoney,

Yang has good advice: avg your income over a year instead of using last three months when lots of OT was coming in.

Look for more expenses, search the forum for examples.

Line 17 of schedule J is where you state that you have OT now but don't expect it in the future.

In order to change your schedule I & J you file admendments w/ the court. Your bankruptcy court clerk can tell you how to do this (or check their website, it will be in the local bk rules)

My impression is that trustees are highly variable on what they will do, but the high positive DMI might automatically trigger a flag with the US Trustee.
w/o prior knowledge of the trustee, I would not take the chance.


I would amend ASAP, file copies with the trustee as well as the court. Better safe than sorry......

Good luck,

Tom in Colo

[chriselle]

average the last six months.

[nomoneyhoney]

Hello nomoneyhoney,

Yang has good advice: avg your income over a year instead of using last three months when lots of OT was coming in.

Look for more expenses, search the forum for examples.

Line 17 of schedule J is where you state that you have OT now but don't expect it in the future.

In order to change your schedule I & J you file admendments w/ the court. Your bankruptcy court clerk can tell you how to do this (or check their website, it will be in the local bk rules)

My impression is that trustees are highly variable on what they will do, but the high positive DMI might automatically trigger a flag with the US Trustee.
w/o prior knowledge of the trustee, I would not take the chance.


I would amend ASAP, file copies with the trustee as well as the court. Better safe than sorry......

Good luck,

Tom in Colo

Thanks for the advice Tom! We didn't know the process of amendment but we got the information from the court clerk of what forms needed to be filled out.
We can bring down the DMI because we didn't max our expenses and we actually didn't account all of them. I just found out about this forum the day after I filed. I wish I discovered this before and I would have gotten a lot of help and information from everyone.

Our transportation was $300 below the standards. We were just counting the fuel but didnt include maintenance/repairs and car registration. So we actually doubled the amount and we're still $150 under the transportation allowance.

We didnt' want to max out everything just in case the trustee asks for a receipt. We want to make sure that we can prove the amounts listed on our expenses.
I don't know what's the likelihood of the trustee questioning our amendment when everything is under the allowance allowed.

He told us to bring the amendment documents at the 341 meeting. I'm confident I can defend all the amended amount. But not sure about my husband's out-of-pocket tuition fees.
He's paying his school $574-$589 every month to cover the amounts that wasn't covered by the remainder of his loan. In addition, we couldn't qualify for private loans that's why he's paying out of pocket. I'm not sure if this expense will fly with them but this is the main reason why we applied. We couldn't afford to pay the credit cards due to his out of pocket tuition fees.

[momofthree]

I think you're going to have a really difficult time justifying those tuition payments unless the school is a condition of his employment (in other words, he is required by his employer to take these classes in order to keep his job).

I think IF you show a negative figure on your schedule J, then you'll be more likely to be able to slide by. Check out the IRS standards here: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

It's not uncommon to be skimping on necessities and doing without when you are trying to make your credit payments, and I think that's a fair explanation if the trustee questions you: you can't live on rice & beans and hand-me-downs forever. You're quite a bit under median, so you're probably less likely to get a lot of scrutiny.

[nomoneyhoney]

thank you everyone for your help.

momofthree--our income is 15k under the median. we just miscalculated our expenses so now we're amending them. i hope the trustee won't dimiss our case thinking we're doing it in purpose to have a lower dmi.