Means test question

[sillywalks]

On line 42, it asks me to list "Future payments on secured claims" -- I have been assuming this would include the home I own (and hope to keep) and have listed my monthly mortgage payment on this line. However, 20B also asks me to list the amount I pay above the exemption amount for my mortgage ($450, in my case).

It seems like this is counting my mortgage payment twice -- am I doing it wrong, or is it supposed to be this way?

[tcreegan]

means tet line 20b and 42

Hi sillywalks,

On line 42, it asks me to list "Future payments on secured claims" -- I have been assuming this would include the home I own (and hope to keep) and have listed my monthly mortgage payment on this line. However, 20B also asks me to list the amount I pay above the exemption amount for my mortgage ($450, in my case).

above the exemption amount ?? not used here.

Line 20B(a) is the IRS standard for your area
Line 20B(b) is your actual mortgage/rent expense, total not just above exemption
Line 42 is the same as line 20B(b)

So you are listing your mortgage expense twice, but line 20B will give you a zero value unless your mortgage expense is below the IRS standard.

[20B(a) Standard] - [20B(b) Actual] = [20B(c)] (enter zero if neg. #)

Confusing, but it brings people with really cheap mortgage/rent payments up to the standard.

Hope this helps, seems clear as mud to me....

Tom in Colo

[Fallonedward]

Hi sillywalks,

On line 42, it asks me to list "Future payments on secured claims" -- I have been assuming this would include the home I own (and hope to keep) and have listed my monthly mortgage payment on this line. However, 20B also asks me to list the amount I pay above the exemption amount for my mortgage ($450, in my case).

above the exemption amount ?? not used here.

Line 20B(a) is the IRS standard for your area
Line 20B(b) is your actual mortgage/rent expense, total not just above exemption
Line 42 is the same as line 20B(b)

So you are listing your mortgage expense twice, but line 20B will give you a zero value unless your mortgage expense is below the IRS standard.

[20B(a) Standard] - [20B(b) Actual] = [20B(c)] (enter zero if neg. #)

Confusing, but it brings people with really cheap mortgage/rent payments up to the standard.

Hope this helps, seems clear as mud to me....

Tom in Colo

Tom: what if your mortgage payment includes RE taxes. Do you put the whole amount you pay each month or bakc out the taxes?

[tcreegan]

means test calculations

Hi all,

Hi FallonEdward,

Put in the whole payment. If your taxes, insurance, easements, whatever, are being paid from escrow, include your monthly contribution to escrow as part of the monthly payment.

Hope that works for youl !!

Tom in Colo

[Fallonedward]

Hi all,

Hi FallonEdward,

Put in the whole payment. If your taxes, insurance, easements, whatever, are being paid from escrow, include your monthly contribution to escrow as part of the monthly payment.

Hope that works for youl !!

Tom in Colo

So using your example

Line 20B(a) is the IRS standard for your area = $1433
Line 20B(b) is your actual mortgage/rent expense, total not just above exemption = $1770
Line 42 is the same as line 20B(b) = $1770

So you are listing your mortgage expense twice, but line 20B will give you a zero value unless your mortgage expense is below the IRS standard.

[20B(a) Standard] - [20B(b) Actual] = [20B(c)] (enter zero if neg. #)
$1433-$1770 = ($663)

Do I get to benefit from paying an additional $663 on my mortgage?

Tom: thanks so much, your the best!!!!

[sillywalks]

that helps!

Thanks all -- Tom especially! -- that does help.

My mortgage is $1395 a month, and the exemption is $946 -- so I list $450 in 21 (which asks for mortgage/utility expenses above the exemptions). I listed $1395 under the mortgage expenses.

I do get a zero on 20B(B).

It's all good (well, except for the filing bankruptcy part!).

Thanks again!

[tcreegan]

reason for over standard expense

Hello all,

Be careful sillywalks, you cannot just list the amount you are over the standard on line 21, you have to have a reason why you should be allowed to claim the additional expense. Generally this is when people show the IRS standard is not up-to-date for their area.

This might be something for you Fallonedward, if the IRS standard is well below the avg for your area, you might be able to put some of that $663 on line 21

Good luck with it all,

Tom in Colo

[Fallonedward]

Hello all,

Be careful sillywalks, you cannot just list the amount you are over the standard on line 21, you have to have a reason why you should be allowed to claim the additional expense. Generally this is when people show the IRS standard is not up-to-date for their area.

This might be something for you Fallonedward, if the IRS standard is well below the avg for your area, you might be able to put some of that $663 on line 21

Good luck with it all,

Tom in Colo

Mine will be easy to explain...its because I pay my RE Taxes with my house payment

[sillywalks]

eep

My amount $1395 includes my escrow (taxes, insurance) as well. I'm not sure how to justify the amount, though -- it's what it costs to finance $191K at 5.25 percent?

I am planning on talking with my mortgage company about possibly getting lower interest and possibly a 40 year mortgage to bring down the payments -- but my understanding is it is better not to actually sign papers on it until after I file?

Would the court make me give up my house because of the payments? I live on the main floor and rent out the basement (which I finished after purchase -- paid for through refinance). The basement brings me about $650 a month -- will that help me keep the house?

That also brings another question -- can I list the TV/Internet expenses as necessary because it is included in the rental agreement with me tenant? I am planning on at least putting half the cost onto the renter, but really I would probably cancel the TV except it is part of the deal with her for renting.

Can I also include a depreciation amount in relation to costs associate with this income? i.e. she pays $650 a month, $100 of which covers her utilities, $75 would go towards TV/Internet, and then $50 to $100 a month in depreciation -- leaving $325 to $375 as actual income from the renter? Is this allowable?

I also have 4 cats and 1 dog. This year (this summer, actually) I have spent about $2000 in medical bills ($700 for shots, physicals, plus medically necessary dental work, several UTI's, chin infections, etc.). If I divide this out, add back what I pay in food/litter/etc. it will show as at least $200 a month for these expenses. I can prove them -- will this be a problem?

What about yard services (lawn mowing and king green services) -- equal to about $75 a month? Will this be allowed?

Just as important, I pay $180 a month for a cleaning service. Normally I would not include it, but truthfully it is really needed. I deal with medically resistant depression, hypothyroidism, sleep apnea, and suspected fibromyalgia -- all of which create fatigue, depression, lack of motivation. It is all I can to to function at work much of the time - I need help keeping things together at home so that I don't get overwhelmed and slip into a major depressive episode (a gym membership is necessary for the same).

Speaking to the health issue -- I have spent around $8000 out of pocket (after insurance) this year so far. Can I average that out when determining how much I need to budget for medical expenses? Part of that expense was unusual, because I tore my ACL and had to have surgery, but it is actual expense.

Regarding child support -- I receive arrearage payments from my son's father (because he did not pay for 16 years). He pays $430 a month normally, but he lost his job about 6 weeks ago and is not currently able to pay. Do I include these payments or not, since he is not currently paying? Even if he gets a job soon, i am not sure I can count on these payments being made consistently (considering his history).

Wow...where did all that come from? If anyone wants to take a stab at any of my questions, that would be really helpful!

Thanks

[tcreegan]

expenses

Hi sillywalks, I will take a stab at this...

My amount $1395 includes my escrow (taxes, insurance) as well. I'm not sure how to justify the amount, though -- it's what it costs to finance $191K at 5.25 percent?
You need to show that 191K is the middle/avg price for a home in your area. Your county recorders office or a local realator should have this info

I am planning on talking with my mortgage company about possibly getting lower interest and possibly a 40 year mortgage to bring down the payments -- but my understanding is it is better not to actually sign papers on it until after I file? Best to have this in place before filing. If you do it after the BK, you become legally liable for the debt again.

Would the court make me give up my house because of the payments? I live on the main floor and rent out the basement (which I finished after purchase -- paid for through refinance). The basement brings me about $650 a month -- will that help me keep the house? No, but be sure to include the $650 as income. Keeping the house depends on how much equity you have in it and how much equity is exempt in your state. Doesn't sound like this is a problem for you...

That also brings another question -- can I list the TV/Internet expenses as necessary because it is included in the rental agreement with me tenant? I am planning on at least putting half the cost onto the renter, but really I would probably cancel the TV except it is part of the deal with her for renting. If you pay for it, its your expense. Keep it simple.

Can I also include a depreciation amount in relation to costs associate with this income? i.e. she pays $650 a month, $100 of which covers her utilities, $75 would go towards TV/Internet, and then $50 to $100 a month in depreciation -- leaving $325 to $375 as actual income from the renter? Is this allowable? It is in tax law but I am pretty sure it is not allowed in BK

I also have 4 cats and 1 dog. This year (this summer, actually) I have spent about $2000 in medical bills ($700 for shots, physicals, plus medically necessary dental work, several UTI's, chin infections, etc.). If I divide this out, add back what I pay in food/litter/etc. it will show as at least $200 a month for these expenses. I can prove them -- will this be a problem? I have seen people do this but not sure where they put it, do a quick forum search for "pet expenses"

What about yard services (lawn mowing and king green services) -- equal to about $75 a month? Will this be allowed?
Just as important, I pay $180 a month for a cleaning service. Normally I would not include it, but truthfully it is really needed. I deal with medically resistant depression, hypothyroidism, sleep apnea, and suspected fibromyalgia -- all of which create fatigue, depression, lack of motivation. It is all I can to to function at work much of the time - I need help keeping things together at home so that I don't get overwhelmed and slip into a major depressive episode (a gym membership is necessary for the same).
I wouldn't try to put these under medical, but they are legit expenses and low enough I don't think they would be an issue. Again, where do you put them?

Speaking to the health issue -- I have spent around $8000 out of pocket (after insurance) this year so far. Can I average that out when determining how much I need to budget for medical expenses? Part of that expense was unusual, because I tore my ACL and had to have surgery, but it is actual expense.
The key to medical expenses is to have documentation

Regarding child support -- I receive arrearage payments from my son's father (because he did not pay for 16 years). He pays $430 a month normally, but he lost his job about 6 weeks ago and is not currently able to pay. Do I include these payments or not, since he is not currently paying? Even if he gets a job soon, i am not sure I can count on these payments being made consistently (considering his history). Definitely, definitely get a second opinion but I think child support is income in BK. You would avg it over last 6 months for means and could avg it over a year for Sched J.

Wow is right sillywalks, but it is really good that you are digging deeper into this. Be sure to do a search on the forum for other opinions and advice on how to enter it on the forms.

Hang in there,

Tom in Colo

[sillywalks]

Thanks

Thanks, Tom, for wading through my novel!

I guess what I will do is put in different numbers for my mortgage to see how it impacts my Means test. My income is above the Median for my state, but even manipulating the numbers (not in my favor) I seem to always come up passing the Means test (by several thousand) -- not including the debts/payments. I guess that is good, right? Probably lowering my mortgage payment won't change that...

As to the rent from my basement -- I put it in the rental income section, but I also put in the 'cost' associated with the rental (the added utilities, wear/tear/additional maintenance), and thought to put at least half the expense of the TV/Internet, since they are in the contract as included in the rental price. That is what that section of the Means test is for, right?

So, as long as I can document what I have spent on medical this year so far, I can average that out, even though some of the expenses were extraordinary (I certainly hope I won't tear any more ligaments!)? Even without that, my med expenses are still over $200 a month -- with it, though, it's closer to $700.

Regarding the arrearage -- child support is considered income, but since my ex lost his job in June, he is not able to make the payments. Does this uncertainty mean I do not have to report it going forward? Obviously, I'll have to count what I have gotten in the past. In addition, my ex is supposed to pay $3K each January. I have no way of knowing if I will be getting it this coming year, even though it is in our agreement. I'm hoping I do not have to list this amount!

I am perusing the forum daily, reading as much as I can. I also have the NOLO book on Bankruptcy, I am looking for an attorney to consult with, and I am keeping track of random questions on my phone for when I meet with someone. I would like to do this Pro Se, and I think I could, with some legal guidance.

The probability of me filing jumped significantly when I found out my second house (from divorce) is going to be auctioned off in foreclosure in 2 weeks. The bank holding the mortgage has been very clear and consistent that they will pursue the deficiency within 30-60 days of the house being sold.

Does anyone happen to know how long it would take them to get a garnishment, once they have the judgement for deficiency? I really want to avoid garnishment, because it would really push my financial situation in the further into the hole!

Thanks again, Tom, for being so helpful!