Credit Card Debt - Include in MEANS TEST but not in SCHEDULE J - Why not????

[Maine]

Maine - Did you read the entire case you cited? I just read it in its entirety and the US Trustee lost!!!!

The case you noted actually backs my argument...in that the debtor had their mortgage (a secured debt) listed on the Means Test even though they were surrendering the collateral after the bankruptcy.

The Trustee objected to this and the judge denied the Trustee's objection.

[justbroke]

Maine is correct. You need to read the entire case! The UST messed up by not doing the motion under 11 USC 707(b)(3)(B)!!!

[biotechsolution]

yes you don't seem to understand that the bankruptcy discharge in itself will 'vacate' your credit card judgement lien.
A judgement lien by rule of law is vacated once the bk is discharged, no creditor can collect on a judgement lien after your bankruptcy is discharged.
Not so in the case of a mortgage.

So in reality it isn't secured by anything. Comparing your credit card judgements to a mortgage lien is has justbroke stated a 'non-starter'.

But I'd love to see the result of your schedules, will your attorney fight you trustee motions?

[catleg]

Definitely the thing to remember about BK court is that this is an assembly line process, and the smoother and less controversial you make things, the easier it goes.

So you lost a job paying 8k-9k a month, and now you're on UC at about 2k a month, the means test for GA allows about 4.5k a month. So if you just wait to file until you're about 4 months unemployed you should be good.

I mean, jobs aren't exactly hanging on trees, and I think I'd figure out a way to stay unemployed an extra month or two to wipe out 200k of debt. The ROI is astronomical.

And legally you're not going to get a better explanation than justbroke's. He knows more about this than 99% of lawyers.

[Fallonedward]

I don't understand why you don't wait them out for the 6 months.
You said you have no income thus no wage garnishment.
You're talking about chapter 7 so I assume no non-exempt assets.
What am I missing here?

Gman, this is what we are having to do. We are waiting the 6 months so our high income (prior to job loss and severance payout) drop off.

The best suggestion I can give you is to wait the 6 months.

[gman]

I found some more information.

Secured credit cards (from retail stores) should indeed be included on Line 42 of the Means Test (form B22A.)

Others have posted here that store credit cards are no different than Visa or Mastercard type of credit cards and all are viewed as unsecured in a bankruptcy. This posting below seems to suggest otherwise.

Sources:

http://www.baumerlaw.com/pdfs/B22A.pdf

http://www.georgiabankruptcyblog.com/archives/northern-district-cases-does-a-credit-card-issuer-have-a-security-interest-in-good-purchased-on-card-yes-says-judge-bonapfel.html

---------------------

I have yet to find any court opinion on credit card judgment liens being included or denied in Means Test calculations.

[catleg]

Well you can listen to what you like; I had Dell and Home Depot as creditors and both filed as unsecured. Best Buy threatens people but as far as I know files as unsecured. You come here for advice, we've given you excellent advice.
You can lead a horse to water but you can't make him drink.

[blockhead]

You can only use credit card payments on your schedule J as an expense if they're payments made by a non filing spouse on a card where the non filling spouse is the only registered account holder.

[blockhead]

"I have yet to find any court opinion on credit card judgment liens being included or denied in Means Test calculations."

Maybe because hardly anyone tries to do it, eh?

[gman]

You can only use credit card payments on your schedule J as an expense if they're payments made by a non filing spouse on a card where the non filling spouse is the only registered account holder.

Not asking about Schedule J.....asking about the Means Test (Form 22A).

[gman]

Gman, this is what we are having to do. We are waiting the 6 months so our high income (prior to job loss and severance payout) drop off.

The best suggestion I can give you is to wait the 6 months.

Thanks for the advice...and I may end up having to go down that path.

By the way - your severance payout may very well NOT have to be included in your projected current income.

Case where this applied is located here:

http://www.bkforum.com/showthread.php?t=57848

and here:

http://www.bkforum.com/showthread.php?t=61498

[justbroke]

Not asking about Schedule J.....asking about the Means Test (Form 22A).

I think you answered your own question a long time ago. Walker isn't 11th Circuit material, but many judges refer to it in making their decisions on this matter. The Means Test includes all scheduled secured debt (period). This is also the case in just about every other Circuit since most have addressed the Means Test.

Why do you even care? Walker also concluded that nothing stopped the UST from a motion to dismiss and getting a dismissal under a totality of circumstances objection under 11 USC 707(b)(3)(B).

The Means Test -- for a Chapter 7 -- means nothing, really, if you are over-the-median.

[gman]

"I have yet to find any court opinion on credit card judgment liens being included or denied in Means Test calculations."

Maybe because hardly anyone tries to do it, eh?

Maybe, maybe not....

This is why I asked if anyone had actual cases and/or personal experiences as opposed to what most people are posting....their opinion.

I saw many people post - incorrectly I might add - that all credit cards are unsecured because it was their opinion - only to later find actual cases where the debts were indeed secured.

For the purposes of this thread - I am seeking facts via web postings, cases, personal experiences, etc.

[justbroke]

I don't know what you want gman. It is well accepted in the 11th Circuit that the Means Test includes all secured debt "contractually" due at the time the case commences (period). There is nothing to look up, but here are ALL the cases that ever have a 11 USC 707(b)(2) motion to dismiss on a presumption of abuse, due to a person surrendering property or otherwise include "other" secured debt on the Means test, will reference these three "landmark" cases:

In re Walker, 2006 WL 1314125 (Bankr. N.D.Ga. 2006)
In re Oliver, 2006 WL 2086691 (Bankr. D.Ore. 2006)
In re Hartwick, 352 B.R. 867 (Bankr. D.Minn. 2006)

There is nothing else to look for and you're asking for information on WELL SETTLED law (even though it hasn't gone to the Supremes).

If you have Westlaw... or Bankruptcy Reporter... have at it. You may be able to find Hartwick which is another great ruling as well. However, in all cases, beware of the 11 USC 707(b)(3)(B) motion to dismiss.

[justbroke]

Also, let me tell you the why not on Schedule J, if you haven't understood what I wrote. The bankruptcy code has always had something called "substantial abuse" since about the 1930s. In order to dismiss a case prior to 2005, to get a Chapter 7 case dismissed you had to prove BOTH that the person had "ability to pay" and that there was some sort of abuse (totality of circumstances, fraud, lying on forms, etc).

When the BAPCPA of 2005 was enacted (Bankruptcy Abuse Protection and Consumer Protection Act of 2005)... the "substantial" abuse was changed to just plain abuse! As a matter of fact, 11 USC 707(b)(3) was divided into two different sections. You can now have a case dismissed for abuse OR a totality of circumstances. This is a departure from "substantial" abuse. Additionally, Congress wanted to push more people into Chapter 13s, so as part of the BAPCPA of 2005, they added this totally disastrous thing (a bright line test) called the Means Test.

After about 2 years of wrangling after the BAPCPA was enacted in 2005, the courts finally settled down on what it all meant. The Means Test is NOT the real test of whether you can get a discharge in a Chapter 7. It's JUST the initial quick, supposedly, objective test of whether you are deserving, based on various IRS and Consensus numbers. Totally arbitrary according to most judges. Especially since the CMI (current monthly income) is not "really" your income but some concocted lookback that is usually WRONG.

Anyhow, Schedule I/J have continually been proven to be a look forward and NOT the "lookback" of the Means Test. I won't quote cases, but the three above should cover the majority of what I just wrote. Caselaw is not just reading one case, but reading hundreds to find the majority view and or that which is now precedence. It took me 2 years to understand the 707(b) dismissal cases at this level.

Suffice it to say that no matter what I say or the cases I point to, you must do the reading... and even if you don't agree with the case... learn to accept it as... "caselaw".