Schedule J - Revision

[smiley0207]

So I filed Ch 7 BK last month and had my 341 earlier this week. The attorney lead me to believe it was a piece of cake. All my expenses were captured at my consultation with me pulling a number out of my head. Well due to my high income, the US Trustee attended and questioned several items on my schedule J. As a result, I am required to pull up various documentation that is not really easy to find in all cases (transportation expenses when my hubby pays cash a lot, gardner that I have no receipts/payment record for, etc). Needless to say, I am off on some things (nothing major) and cannot produce gardners bills (long story), missing 1 cleaning service bills, etc. Most significant , is I noticed my pulling my husbands paystubs, his income calculation did not include his commission, which is an additional few thousand dollars a month. I think I will still pass the means test but what does this mean? Do we simply revised the Sch J with the corrections and move on? How much do you need to pass this means test? We were short about 5.5K/ month but now will only be short about 2K. Will the trustee be pissed? These were truly mistakes but I am seriously stressing and my attorney is not getting back to me. HELP.

[momofthree]

With the trustee already questioning expenses that you don't have proof of AND an additional couple thousand in income each month, you may be entering ch.13 territory. If you have discretionary income of at least $182, then they can deny your ch.7. You can then choose to convert to a ch13 or deal with your debts yourself. Good luck and keep us posted. Hopefully your attorney can help you attain your ch.7 discharge...

Things like hiring a cleaning service may not be allowable expenses even if you can produce proof of the expense. Those types of services are considered luxuries and not a necessary living expense when you're filing bk.

[tcreegan]

Hi smiley,

my high income, the US Trustee attended and questioned several items ...normal, over-median income can flag the UST

various documentation that is not really easy to find ...get as much as you can, show the UST you are cooperating and not hiding something

his income calculation did not include his commission, which is an additional few thousand dollars a month. I think I will still pass the means test but what does this mean? ...if your disposable monthly income (DMI) on Sched I minus Sched J goes up enough it will convert you to Ch 13. Means-test doesn't seem to be a problem.

Do we simply revised the Sch J with the corrections and move on? ...your attorney will file an amended schedule I and J and recalculated means-test. The UST investigation could hold you up, getting them what they are asking for will help speed it up.

How much do you need to pass this means test? We were short about 5.5K/ month but now will only be short about 2K ...to "pass" the means-test, income minus expenses should be at or below median-income for your state. Sounds like you are 2K below, so you "pass" (but you can still "fail" the means-test and file Ch 7)

Your DMI based on Sched I minus Sched J is more important, for Ch 7 this should be below $188

Will the trustee be pissed? ...maybe slightly annoyed, they must see this all the time. ...and they are more likely to blame your attorney rather than you. Be honest, show them you are working hard to cooperate, they'll get over it.

Sorry it didn't turn out to be the piece of cake your attorney expected, my sympathies on digging up the documentation...yuck!

Tom in Colo

[smiley0207]

Is DMI the same as my net income?

[free2breathe]

DMI = Disposable Monthly Income. Like Tom said, it's your Schedule I (actual income) minus Schedule J (actual expenses). That number needs to be under $182 to keep you from slipping into Chapter 13 territory.