If you are recently divorced

[smith2b555]

If you recently divorce and file, do they count your ex's income in the means test for the months you were married?

[drowning123]

Yes.

[smith2b555]

How do they determine your elegibility for which chapter and if 13 your payment amount?

[drowning123]

The median test helps to determine your eligibility for 7 or 13. For 7, you must be under the income allowed for your state for the number of people in your household. Let's say for Illinois, the income is $50,000 for a family of 3, your income cannot be over that amount. Of course, the maximum allowable income goes up as the family gets bigger. Got it?

Now, there's something called Schedule J, which lists all your expenses. If at the end of the month, your expenses are more than your income, and you have a negative balance, you are eligible for Chapter 7. If you have a positive balance over a certain amount (around $200), the trustee can say you have enough money left over to do a Chapter 13. The court decides how much you pay per month toward your Chapter 13. It could be any small amount. The good thing is, they don't add up all your bills then decide the amount you pay under Chapter 13. What they do is, they allow you to pay what you can afford for 3 or 5 years. After the 3 or 5 years are done, you're done with the creditors, even if they're still owed a balance. You don't owe them anything anymore.

I hope that helped.

[smith2b555]

But if they include your ex's income in the 6 months prior and it's no longer there, how can accurately determine your payments or eligibility when that income is no longer there?

[rjmwx81]

Your Schedule I and J are going to show your income and expenses going forward. The "previous 6 months" is just for the means test. If they ask why the Schedule I is different from your means test income, you can simply explain that you're divorced now and won't be receiving that spousal income. Be prepared to show your divorce papers.

[smith2b555]

So, I would fail the means test and have to file chapter 13 or would I fail and the schedule I and J make me eligible for chapter 7?

[drowning123]

Schedules I and J are more important than the means test so to speak. In your case, because of your soon to be ex-husband's income, you may be over the median (means test), but since your situation is changing to one income, the trustee may take that into consideration with regards to your expenses vs. income. Why don't you do a mock up of all your expenses and subtract them from your income alone. Then subtract them from your combined incomes as well and see what sort of figures you get. Hopefully you can prove that you are going through a divorce.

[rjmwx81]

Another, perhaps more simple option is just to file 6 months after you stop receiving income from your spouse.

Otherwise, having income that is above the median just creates a "presumption of abuse" on a Chapter 7. The trustee will look closely at your Schedules I & J to see if you can fund a Chapter 13 plan. But don't despair...read around the forum and you'll see lots of posts from people who were over the median and still had their Chapter 7's go through.

[smith2b555]

Thanks for all the advice. I'm not going to file until after the divorce so I will have a decree.

[drowning123]

That's a good step towards the right direction, smith. Good luck with everything.