Mean Test and Collecting Unemployment Benefits

[Dee]

IO-

As others have said, being over the median absolutely DOES NOT disqualify you from a Ch 7. My annual salary is over the median in our state by about $18k, but we still qualified for a Ch.7 because we had negative DMI on our Schedule J. One of the reasons for that is that Unemployment Compensation, which my husband was getting, does not count as income is our state.

Just because your attorney is highly recommended, has great credentials, and specializes in bk does not mean he will have the right answers or do what's in YOUR best interest. I educated myself (mainly on this forum) and have had to stand my ground several times to tell our attorney that he was incorrect about something. He initially told us we would have to do a Ch 13 because we were over the median, but I stood firm and said "No Way!". He also tried to count the UC on both the Means Test and our Schedule I. I had already researched Florida rulings and knew that wasn't correct. Don't assume his answers or advice are correct or in your best interest - verify!

If the $256 is actually positive DMI on Schedule J and not the amount over median, then there are plenty of ways to get that number down. Do you get a tax refund each year? Then increase your withholding. Did you add all over-the-counter medical needs? Our over-the-counter allergy meds alone knocked $20 off our DMI. Gas prices are going up - did you factor that in? Do you have life insurance? If not, you should and now would be a great time to get some. Before you know it, your DMI is under the threshold!

[tobee43]

depending on where you are and it changes state by state...district by district and at times (where we happen to live) county by county as to whether your unemployment insurance is exempt under the social security act....

interesting enough...it was exempt as income under the ss act and of course my question was how couldn't it be...it's only temporary income...what happens if we are pulled into a chapter 13 because of our DMI which includes the unemployment insurance and then we deplete our benefits...what then????? do we have to go back to court? can we go from a 13 to a 7???

lucky for us, one atty told us it was in fact counted and the other insisted it wasn't. (we went with that one) EI was was listed on i schedule and then our atty listed it under "other" and then subtracted it!! LOL!! i was scared to death...but it worked our DMI without it was approx -3k...or about minus ...so actually in our case it most likely would not have made a difference.

[IOEveryone]

Thank you, everyone, for your research, feedback and support! I will be spending my afternoon researching the eligibility of my UI benefits and taking the Means Test (maybe several times to ensure I'm getting the most out of it!).

Also, just because I wasn't clear earlier, the approximate $256 is the monthly overage of our (wife and I) combined monthly income compared to our county's median. This figure represents a 6 month average of my UI and wife's current salary. The six months actully matures at the end of February. I want to fit under all necessary hurdles before I land another job which may catapult me over a Ch. 7 option (even that seems to be up for discussion based on the great advice provided by justbroke). Typically (if that can even be applied during our current economic crisis) my compensation breaks into the low six figures. I'm almost fearful of recieving an offer until I've filed and an attorney tells me it's ok to continue my career!

[justbroke]

justbroke -

I just took the means test (and believe I accurately inserted the necessary information) and it says I qualify for either a 7 or 13. Now I'm really confused. Why did the attorney solely focus on just the median income? <sigh>

(I have been traveling today, so apologize for the late reply!)

Because there are MANY attorneys that will immediately just look at your income, and say "no you don't qualify for a Chapter 7 because you are over the median". That is absolutely a misleading and false statement. Being over the median just means that you have to complete the Means Test to test your expenses based on the IRS Standards. Being under the median allows you to use actual expenses (for the most part).

The attorneys that won't file an over-the-median income Chapter 7 are what I like to call Chapter 13 Bankruptcy Attorneys.

[debee]

the attorneys that won't file an over-the-median income chapter 7 are what i like to call chapter 13 bankruptcy attorneys.

lol!