Confused about Means and DMI on J

[Peeps]

I seem to be getting myself more and more confused about the means test and DMI on Schedule J.

I'm trying to understand if a Ch. 7 is right for me. I fall WAY (really, really, embarassingly WAY) below the median income for the means test. If I put my numbers into Schedule J, I have a DMI of about $1 and that's with some really tight corner-cutting. I'm guessing I can't submit a negative number on J if I go through with a BK.

But I'm also considering a home loan modification. If I do a schedule J with an estimated reduced mortgage payment, then the DMI is around +$500. I have other expenses (like medical, groceries) that can be legitimately bumped up, but do I even need to bother? Does a +$500 DMI on schedule J have the risk of pushing me into a Ch 13 even if I'm well below the median income?

Hope that's not too dumb of a question. I'm trying to get smart on this stuff but sometimes I think the more I learn the more confused I get!

[daylate]

Not difficult to get confused by this topic. You say you can't have a negative DMI if you file a 7. On the contrary, you want a negative DMI. (at least I think you do). If you show more than 187 positive DMI then you can get switched to a 13 whereby you have to pay the extra DMI to your creditors for 3-5 years. It seems to me that if you get the loan mod and have +500 DMI your 7 is toast. Since I fall into the confused category I look forward to other responses

[momofthree]

Ditto the pp. Write in your actual expenses, even if that means you show a negative dmi. That's no biggie in a ch.7, quite common, in fact.

[tcreegan]

Hi Peeps,

On schedule J you put post-BK expenses, not 'Im broke and trying to avoid BK' expenses. We scrimp and scrape by for so long we forget what 'normal' people spend on things. Schedule J is 'forward looking' so you put down what you expect to pay; the modified mortgage or rent, you have to have a place to live!

Just a word of caution on the mortgage mod, most people are having a really hard time getting one in place and lenders are being really sloooooow about the process. And they might offer one that only lowers the payment by a hundred bucks or so. Hopefully that won't be the case w/ your lender, just wanted you to be prepared for the worst...

Tom in Colo

[Peeps]

I know... it's one horror story after another on the mods. But at least it's worth a try. I don't have my hopes up too high so it's kind of weird trying to figure out what would go on a schedule J. I'll go with the negative DMI, note a possible mod, and try to remember what it's like to live with "normal people" expenses.


Thanks tcreegan, momofthree, and daylate for the info... it all makes much more sense now!

[rdknipp]

I know there are a lot of different opinions on reaffirmation agreements around here. I'm not starting that debate as I believe it should be a case by case analysis. However, it should be noted that with a negative budget it can be very difficult to reaffirm loans. So if you were planning on reaffirming your house, or your car (unless its a credit union), you'll probably want to keep your I & J positive by a dollar.

Our trustees also like to lecture debtors at their 341's if they come in with a negative budget (how can you get a fresh start if you are -500 a month). Not a big deal but its also not a big deal to amend your budget if you do get a loan mod. As a below median debtor you shouldn't have too much trouble eating up that extra $500. Though like Tc stated, I wouldn't hold your breath on the loan mod.

[daylate]

good point rdknipp-In thinking about the whole I & J thing-it seems to me that it is easy to show a negative DMI-what it doesn't seem to include is a provision to build up a savings for emergencies which caused a lot of us to get in the mes we're in in the first place. While budgeting is necessary it is not guaranteed to work out that way. What about the provision for the unforseen? My washing machine breaks but I can't put 100 a month into savings on J so how do I handle that? My state exemption sucks so I can't have a lot of cash cushion. I would (like to) tell the trustee yeah, I know it really sucks that I have a 2k negatve DMI but unless you can get me a lower insurance premium for the same crappy coverage,get my teeth fixed for free, lower the cost of food and guarantee that gas won't go to $4 a gallon and that I will need no major repairs on anything I own,(and this is just for starters) then this is what it comes out to be. Now obviously I can't spend 2k more than I have so don't even think about making this a 13. OK -rant over.