What if my expenses are WAY LESS than irs allowances?

[debee]

We pass the means test and would be allowed to file Chapter 7, but I wonder whether it would actually be granted. The means test allowance amounts are way higher than what we actually pay.

Our mortgage (piti) is $1300 but the allowance is over $1700. Does that mean the trustee could make us file Chapter 13 and pay the $400 per month?

Also, our cars are paid off. Both are 20 years old. Do we lose the "ownership" allowance because we have no loans? And is that amount then applied to what we could pay back?

Our debt is 170k heloc on a rental that used to be our principal home, a 155K mortgage on a rental that was our second principal home. We want to keep the house we're in now. Our income is a few k over median.

Anyone have any experience with this?

[debee]

oops. i meant we have no loans on the cars.

[tcreegan]

Hi debee,

The means test gets you in the Ch 7 club, but the DMI from Sched I & J is what keeps you in the club or gets you bounced to the Ch13 room...

Download the forms and work out what I minus J equals. If it is over a hundred or so, you end up in Ch 13 range....

I am not sure, but I seem to remember that the IRS standard is an upper limit on expenses, you use the IRS standard or actual whichever is less.

Need one of the gurus to weigh in here.....anyone?

Tom in Colo

[debee]

Question: When filling out schedule J for expenses, do we include the expenses (mortgage, heloc payment, etc) of the rental properties or just the home we live in?

(We know we need to get a lawyer if we proceed, but I trying to get a feeling for whether we even have a case before paying one!)

[tcreegan]

Hi debee,

On schedule J you include what expenses you will have post-BK. If you lose the rentals, then you lose the expenses. If you keep them, you keep the expenses. The primary residence is a little different, if you surrender your home you still have to live somewhere. So you include the expense of your living situation, current place or the new place.

Good questions, keep em coming...

Tom in Colo

[drowning123]

I had no idea about using what my expenses will be after BK on Schedule J. I used my mortgage, heloc and car payments on my Schedule J, even though I had every intention to surrender the house and the car. I didn't lose the expenses, because that would have meant an extra $3,000 in my pocket. Don't know how I got away with that one.

[Fallonedward]

Where is a good spot to download the forms at?

Hi debee,

The means test gets you in the Ch 7 club, but the DMI from Sched I & J is what keeps you in the club or gets you bounced to the Ch13 room...

Download the forms and work out what I minus J equals. If it is over a hundred or so, you end up in Ch 13 range....

I am not sure, but I seem to remember that the IRS standard is an upper limit on expenses, you use the IRS standard or actual whichever is less.

Need one of the gurus to weigh in here.....anyone?

Tom in Colo

[dumpinmydebt]

I got mine from here

http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx