Filing Ch. 7 with "Special Circumstances"

[clevelandmom]

Hi Everyone. Thank you for posting all of your stories about your own financial hell so that I don't feel alone. This Forum is probably cheaper than therapy.

Here's our scenario: Husband is in construction and has been riddled with a lot of lay off periods in the last couple of years. We stopped using AND paying credit cards in August of 2009. Last year we STUPIDLY attempted to use a Debt Consolidation Firm (NOTE: DO NOT EVER DO THIS!) - and after paying over $400 per month, we ended up getting sued by a credit card anyway this past July. Husband did work the beginning of this year, but was laid off again in mid-August. Probably will be for quite a while too. I work full time as a secretary.

The lovely law firm who is suing me (just me, this particular cc was in my name only) now has a judgment against me and just last week furnished me with garnishment papers. We have been waiting to file Ch. 7 for the last couple of months because we did not pass the means test. We are getting close, but are still $135 over. Our atty. today said that we will file our Ch. 7 next week (just in time to avoid being garnished) and that we will file it with "Special Circumstances" - stating that with my dh on unemployment AND me getting garnished will leave us destitute. The atty told us it will be an uphill battle but she does believe we can win this. She said that most likely the Trustee will file a Motion to Dismiss but we will come back with this argument and prove that there is no way we are "abusive." Has anyone had any similar circumstances? Does anyone have any advice? This waiting has been horrible, and I really think the only thing that has kept me sane is reading your stories. Oh, and the wine. Cheers. Thanks in advance for any advice and best of luck to all of us!!

[2manybills]

Clevelandmom - wine does get us through some of this, that's for sure! How long as your husband been on unemployment? In California, they technically only have you file 8 weeks worth of paystubs when you file, or in the case of being on unemployment, you file nothing, but a statement.

[backtoschool]

If you post your expenses here, we might be able to find you some more legitimate expenses that would get you closer to passing the means test without the special circumstances. Special circumstances are a red flag for the US trustee, and it would be better to file without them if we can find a way to get you there.

[clevelandmom]

Hi 2manybills: Husband has now been on unemployment for 2.5 months. I know we have 9 stubs because the first week was a "waiting" period. We are in Ohio. I would think our income is diluted enough by now, but apparently not. He made too much at the beginning of the year (there was a little overtime too, not much, but a little). The biggest problem we have is my pending garnishment. If it wasn't for that, we would have no problem waiting because we would probably pass the Means Test (we think) within the next month or 2.

[2manybills]

Hi 2manybills: Husband has now been on unemployment for 2.5 months. I know we have 9 stubs because the first week was a "waiting" period. We are in Ohio. I would think our income is diluted enough by now, but apparently not. He made too much at the beginning of the year (there was a little overtime too, not much, but a little). The biggest problem we have is my pending garnishment. If it wasn't for that, we would have no problem waiting because we would probably pass the Means Test (we think) within the next month or 2.

You guys should be fine. Even if he made a lot of money at the beginning of the year, your attorney should only be doing a "6 month" look back, not an entire year. Ask your attorney about that, because I don't know why he's going back a full year. Also, I agree with BTS, I would not want to file "special circumstances". Do everything you can to make this work normally without raising any flags.

[clevelandmom]

Hi BacktoSchool,

We pretty much did all the deductions that we are allowed from what I know. I can't be that specific on here, but is there anything you would think that most people don't think about? I am hoping to go through all of it again next week with the attorney, line by line, and see if we can't find something else that they haven't thought of. I keep thinking there must be SOMETHING. . .but I have to see the list in front of me. I am pretty sure that we will have to file with special circumstances though. I do realize it's a red flag to the UST, but at the same time we can prove that we are not abusing because our 6-month total is continuously diluting.

[backtoschool]

Some overlooked legitimate expenses for your schedule include:

1. Medication including over the counter medicines
2. Dues and all types of insurance including health, life, home, fire, auto, personal.
3. All medical expenses including eyeglasses, dental appointments, chiropractor, therapy, physical therapy.
4. Home association dues

If you do a search on "means test" and/or "schedule J expenses" you should come up with some idea of what others are claiming legitimately. On another note, if you do a search on "special circumstances" you are going to see a lot of US Trustee drama and dismissed cases.

[clevelandmom]

Wow, you guys have me a bit worried now. What is my alternative then? I am going to get garnished in 2 weeks, so I REALLY need to file now. What should I do?

[backtoschool]

Wow, you guys have me a bit worried now. What is my alternative then? I am going to get garnished in 2 weeks, so I REALLY need to file now. What should I do?

Here is the means test calculator used by people who file pro-se. It is often linked to on this forum.

http://www.legalconsumer.com/bankruptcy/nolo/

Play around with various scenarios for the numbers and see if you can eliminate that $135 legitimately. Without you posting more details of your expenses, we really can't give you specific suggestions. As I mentioned in an earlier post, you can look at what others have posted for their expenses by searching on "means test" and perhaps that will give you an idea, but in order for us to give you more specific suggestions we would need to have more information.

[CoBelle]

I know that you can legitimately claim up to 15% of your income for charitable/church contributions.
Flue shots and shingles shots if not covered by your insurance would easily do it ($25 x2 for flu and about $150 per shot for shingles.)
Do you have two cars? Allowed expenses for 2 cars is pretty amazing.
Did you put the payout for the judgment on there?
NOLO is pretty good about letting you know what you may claim based on your zip code. There are but a few places where you can fill in what you want.
Do the NOLO means yourself and see if it still comes out too high.
Good luck and pass the wine!

[tcreegan]

Hi Clevelandmom,

The online calculator is great, but if you're like me and prefer pen and paper go to:

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

and get form B22A

Just to clarify; are you within $135 of median income after taking the deductions?

Finally, courts have split over the issue of unemployment being income on the means-test or not. If it is not counted, that would help your case, right? Mention this case to your lawyer:

In re Sorrell, 359 B.R. 167 (Bankr. S.D. Ohio 2007).

This was among the 1st cases saying unemployment is NOT included in the means-test. It was a case in Ohio, so your lawyer/trustee/judge should be aware of it. Ask if you can exclude UI in your court.

Hope this helps,

Tom in Colo

[backtoschool]

I know that you can legitimately claim up to 15% of your income for charitable/church contributions.
Flue shots and shingles shots if not covered by your insurance would easily do it ($25 x2 for flu and about $150 per shot for shingles.)
Do you have two cars? Allowed expenses for 2 cars is pretty amazing.
Did you put the payout for the judgment on there?
NOLO is pretty good about letting you know what you may claim based on your zip code. There are but a few places where you can fill in what you want.
Do the NOLO means yourself and see if it still comes out too high.
Good luck and pass the wine!

Claiming tithing when you have no receipts and have no history of tithing is a huge red flag for the US trustee.

[tobee43]

Claiming tithing when you have no receipts and have no history of tithing is a huge red flag for the US trustee.

it not only is...we HAD to produce actual receipts and attach them to the petition!!!!

[2manybills]

Clevelandmom, what I would do is contact your attorney, ask him why he is going back more than six months on your wages. Then go through your numbers like everyone here is saying. Also, how is your Schedule J coming out? That is also important. Another place that our attorney included an expense is under "Telecommunication", he put $50.00 of our cell phone bill in there. If at all possible, I would not file under special circumstances, nor would I allow my wages to get garnished. Check with your attorney, there also should be laws in your State about filing a "Claim of Exemption" on the wage garnishment should your wages get attached. Since you are the only person working at this time, that may help also.

[Pandora]

Dont forget to include any and all deductibles you have to pay for health insurance / rx coverage! Many people forget about those.