Got a Presumption of Abuse Letter in the mail today.....

[drowningNIL]

We had our 341 over 2 weeks ago. Naively thought we were in the clear as that felt pretty thorough and lasted 15+ minutes. Today got the 707b letter. It is dated 11 days after our meeting.

All it says is "Notice is hereby given that the United States Trustee has reviewed all Materials filed by the debtor and has determined that the debtor's case is presumed to be an abuse under 707 (b) (2)"

I have a sick numb feeling about this. We are over median but were hit with $60K loss of income over the past 2 years - as our taxes show.

So....we had been trying to contact our attny's office for over a week now anyway re something else and no replies. The letter arrived to us in an envelope from his office but with nothing else. He won't be in the office til tomorrow morning. Lots of time for us to sit and worry about this one.

What do you all think? I feel nauseous at this point.

Thanks for any replies.

[backtoschool]

What did your expense schedule look like? If you can post some specifics we will be in a better position to help you.

[drowningNIL]

BTS...i'll have to dig it out. They did a 707b review on us prior to our 341 and asked stupid things like explain $160mo personal care and hygeniene. So I did. (for a family of 5 and honestly it was off the cuff and I even remembered more later that I forgot) and then why $275 monthly school and activities fees for 2 of my kids (this includes soccer, dance, school fees, and band fees) They asked about a contribution to a retirement fund. It's actually mandatory and has 2 more years til pay off. Why we pay for MIL's cell phone - our cell bill is $160/mo on a family plan. (we did a spread sheet of the bills/mo) Explain $80/mo pet care. That is one thing I did have receipts for actually. I don't know what they could be trying to catch us on. Most of the questions in the review seemed very nonsensical.

means test -$283.49

going to hunt down J

[drowningNIL]

ok here's my sched J

mo net income $7080 (which is BS anyway since there are 26 pay checks and we really don't see anything more than $6500 net in one month's time really) this includes our health, life, and auto insurance premiums taken out already

$2741 house&taxes
$ 375 heat/gas (we did a 12 mo average from our bills)
$ 25 water
$ 55 phone
$ 320 Other utilities (cell, cable,internet & garbage)
$ 150 home maint (26 yr old house)
$1000 Food
$ 310 clothing (5 ppl)
$ 30 laundry/drycleaning
$ 250 medical
$ 500 transportation (gas and car maint 2 cars)
$ 50 recreation
$ 75 charitable contributions
$ 378 auto payment
$ 745 "other"

Here is the explanation of my "other"
school lunches $80
school fees (activities sports) $275
pet care $80
personal hygeine $160 (includes hair cuts and shampoo, soap, toothpaste, contact sol etc)
work lunches $120
vehicle tags $30 (which they did catch me on on the review it is actually $25 and I corrected myself - honest mistake)

(totals $745)

So average monthly expenses are $7004

monthly income $76.19

I am sure I can bring that down more too because I did not include Costco membership or AAA or ?? I bet there's more. I just felt so confident.

The gross income is over $10k but there are deductions for the insurance premiums and also PST loans and those loan payback is soemthign they questioned in the 707b review...but they ARE mandatory paybacks.

I feel a little yucky putting all this info out there but I appreciate any help.

Thanks much.

[backtoschool]

How big is your family? Right off the top, the food expenses look high.

$310 clothing is high

Is the $2741 housing significantly over the allowed housing pricing for your area per the irs?

Remember, the US trustee only has to get you to about $190 a month positive cash flow to throw you into a chap 13. For food and clothing expenses you have to take the irs standards for your family size and area.

Loan paybacks are usually excluded by the US trustee as well.

[drowningNIL]

It's a family of 5. That house payment includes real estate taxes too of about $800 mo and a first and 2nd mortgage.

Is $1K/mo high for food for a family of 5? I have an attorney and he never questioned it. In actuality I probably spend more like $1300/mo on food. I cook dinner every night. We don't go out to eat much at all. Also irs standard allow for $60/mo clothes per person and I took the extra $10 because of having to buy winter jackets, boots etc.

It's been a HUGE adjustment going from what we used to bring in to what we live on now. I feel we are just scraping by.

[ccsjoe]

Family of 5 B2S. Food is right in range actually. I agree with you on clothing, have questions about housing, and also question school fees for what appears to be extra curricular (read optional) activities.

[ccsjoe]

We're relpying at the same time drowningNIL....lol. Sorry you got hit with this, but I'm sure some things will work themselves out. Quite honestly, I can not see what the UST is questioning...food is not it, certainly..maybe clothing and school activities? Maybe UST needs a full breakdown on the housing piece?

[backtoschool]

In addition to the food, you have separate line items for work lunches and school lunches. I was questioning those.

I think the loan payments and the housing are probably what is triggering the US trustee though.

[drowningNIL]

Ok here's the deal with the activity fees. I even said on the "other" "School fees (Activity Fees)" just like that. I pay $70mo for one child for dance. I have been paying that for 5 years. I pay about 24/mo for soccer in spring and fall season for her too. The balance of her fees are school fees (registration & book fees and school supply fees and field trip fees here and there and band too) My other school aged child is disabled. The fees I pay are for school registration, book fees and band fees & private music lesson fees, and a few odds and ends. I broke this all down piece by piece with explanations when I answered their 707b review and even mentioned the disability. The activities are important socially and this child can't participate in sports.

Here is a clincher. Our third "child" is a 20 yr old son that lives with us. He pays for NOTHING. Obviously not by our choice. He has been in trouble with the law many times these past 2 years and we have paid a lot in bail and support for him, he has been hospitalized 2X in the past year for depression, dropped out of college, has substance abuse issues, broken down car - we paid to fix, lost jobs, been homeless for a period of time when not with us. He has caused all of us so much heartache and grief. He probably has mental issues but he has no health insurance at this time. He does have a very part time job now less that 10 hours/week - he says it's all he can find - and he is probably telling the truth on that as with no skills and unemployment the way it is he is not a prize for employers when there are so many over qualified that need the same job - but we haven't seen a dime of money he has made. He has nothing to show for it, either. We want him OUT but we were waiting until this whole ordeal was over.

[drowningNIL]

In addition to the food, you have separate line items for work lunches and school lunches. I was questioning those.

I think the loan payments and the housing are probably what is triggering the US trustee though.

The schedule J is marked off that the house payment does include the taxes. ??

Also, the loan is not a 401K loan payment but when they did the 707b review they called it a 401K loan repayment. We sent them documentation off the payoff date (2 yrs from now) and told them it's a mandatory repayment PST Trust loan. I just pray this all gets sorted out.

How can they bother with clothing costs when they allow that amount?

Thanks much for your help BTS and Joe.

[Fallonedward]

This is what you are allowed for a family of 5

Collection Financial Standards for Food, Clothing and Other Items

Expense Four Persons
Food $752
Housekeeping supplies $74
Apparel & services $244
Personal care products & services $66
Miscellaneous $235
Total $1,371
+ $262
Grand Total $1633

More than four persons Additional Amount Per Person
For each additional person, add to four-person total allowance: $262

[drowningNIL]

This is what you are allowed for a family of 5

Collection Financial Standards for Food, Clothing and Other Items

Expense Four Persons
Food $752
Housekeeping supplies $74
Apparel & services $244
Personal care products & services $66
Miscellaneous $235
Total $1,371
+ $262
Grand Total $1633

More than four persons Additional Amount Per Person
For each additional person, add to four-person total allowance: $262

ok so then is it $1895 for a family of 5?

I added my food, clothes, laundry, pet care, school & activities, recreation, lunches, and personal up and get $2105...but then taking the school fees out (which I thought you were allowed $147/mo per kid as on the means test?) that brings my total down to $1830.

Not sure if the school/activity fees are even included in this whole $1633 or $1895 amt. ??? If not we are right on target. I would sell my kidney to keep my kids untouched by this crap so what's up with the allowed $147/kid then? I am under that amt.

[drowningNIL]

another thing. I have seen mentioned where people set money aside as an expense for birthday and christmas gifts. I don't have that. I guess I should. I left out things that seemed frivolous.

[Fallonedward]

Sorry, I made it confusing Drowning...It is a Grand total of $1633 for a family of 5 ( I added the $262 that you are allowed to add for more then 4 persons and that brings it to the grand total $1633)

Do you have a medical expenses that you forgot. That and fuel got me over my hump

ok so then is it $1895 for a family of 5?

I added my food, clothes, laundry, pet care, school & activities, recreation, lunches, and personal up and get $2105...but then taking the school fees out (which I thought you were allowed $147/mo per kid as on the means test?) that brings my total down to $1830.

Not sure if the school/activity fees are even included in this whole $1633 or $1895 amt. ??? If not we are right on target. I would sell my kidney to keep my kids untouched by this crap so what's up with the allowed $147/kid then? I am under that amt.