Means Test

[debee]

debee,

I followed your link. So, it says $ 4,124 = Total Standard Monthly Expense Deductions for a household of two. Median Income is $62970 or less and we earn $4333 a montyh BEFORE taxes.

I'm just confused by the "Total Monthly Expense Deductions". Clearly I can't afford that right now which is why I'm essentially renting a room to make ends meet. Do they use the "Standard Monthly Deductions" for housing, food, etc or what I'm paying NOW in my current situation?

If your income is $4333 then you don't take the Means Test at all. You are under the median which is $5248 for a household of two.

But to answer your question, on the Means Test you use the standards even if they are higher than what you actually pay. There are areas where you enter other expenses and those would be actuals - starting around question 25.

What you need to do now is print the expense form B6J and see how much disposable monthly income (dmi) you have. You can forget the Means Test.

ETA: Check these standard amounts: http://www.justice.gov/ust/eo/bapcpa..._standards.htm

ETA again: Just to clarify, when you are filling in the expense amounts if you put in your current food budget of $125 per month (living on ketchup soup and frozen peas) you may end up with too much DMI. So you check the standard for two people and see that it is $537. Ok, so you need to increase your food budget because once you stop paying your cards, you will be able to eat healthier. Not sure if it's making more sense yet. Let me know.

[overthedebt2]

Thanks debee. Tried to PM you but it wouldn't go through??

It's making a little more sense. However, I would only have any disposable income because of how cheaply I'm living at the MOMENT. It looks like I have $1000 disposable income because I'm renting a room and simply can't even afford an apartment, utilities, furniture, etc. So am I supposed to go out and try to rent a $1500 apartment to make my expenses look higher? Ohhh so worried and confused now.. Atty made it seem like we were totally fine given our situation and amount of debt. Ch 13 was never even mentioned and she said we look like a pretty open-shut CH 7 case.

[debee]

I did get your pms and sent two back.

I think you should trust your attorney.

When you fill out your schedules, they are your expenses as of the filing day. On that day, you no longer pay any debt you intend to discharge. So you may have been very frugal with household expenses and groceries before filing, but as of the filing day you can spend more. So you put down that you are spending more because going forward, you will be.

Some people do in fact need to get apartment leases, buy cars, get term life insurance, etc in order to qualify for a chapter 7. It's completely wrong and insane but bankruptcy punishes the frugal and responsible but rewards the profligate. If you had a really expensive house and car payment, you'd be laughing all the way to your 341.

Whether or not you will need to change your living arrangements or buy a car to qualify, I don't know. You have some expenses on the other side of the country that you can claim as well.

If you really have $1000 DMI, you're a chapter 13. So you would need to come up with some expenses to reduce that. It may be that you're forgetting something. Most people don't get all their expenses when they first start calculating them.

[karm43]

I have a qestion do they always look at 6 months back? What if your income went down suddenly?

[jetsfan2010]

I have a qestion do they always look at 6 months back? What if your income went down suddenly?

what made it go down

[karm43]

Im quitting my second job. I'm exhausted, can't do it anymore. I just have to wait the 6 months

[IamOld]

karm43, my atty says a lot of people do that - If you can pay rent/mort car food, etc., screw the credit cards, w/out the second job, you'll be fine!!! and in the ch7 before you know it!!!