More Means Test Questions

[DirkDiggler]

I'm currently in the process of gathering all info and completing our attorney's questionaire packet so we can get it to him and him run the Mean's Test....but I have some questions...

My income is pretty straight forward, I have gross pay with net pay after taxes are taken out.....my wife's stub has a couple gross pay figures....she has medical, dental, vision and dependant care taken out pre-tax, THEN taxes taken out of her pay....which amount do I use for the means test purposes? The biggest gross amount or the amount that has the pre-tax deductions taken out?

Using the highest amount on her check puts us over the means test by $840 a month....using the middle amount (which is the amount on her yearly w-2 for tax purposes) we are still over on the means test but only by $68.

Bottom line is we don't want to have to file Ch. 13 and I will take an unpaid month of work off if that is what it takes LOL

Thanks

[newbie2]

I believe you use the total gross. You can then back out the deductions (whether they be pre-tax and post-tax). The gross is still the gross regardless of whether some line items are pre-tax items. Pay attention to the deductions on the other schedules, passing the means test is just one part of the equation. If after filling out the other schedules you don't have any disposable income that could be paid to unsecured creditors, you should still be able to get a Chapter 7.

[DirkDiggler]

Ok, I'm going home early today to finish my schedule I & J, I'll post them up for critique I guess I just mis-understood about how the means test works...I have a high gas expense and am going to get some AFLAC and I've already increased my car insurance coverage and lowered my deductibles....:crossingfingers:

[DirkDiggler]

Well, after some more number crunching, if I can get some short term disability insurance for around $300 a month, and cut my hours back by 50%, I should be able to pass the means test and qualify for a ch. 7. The reason we really want to do a 7, is my wife's private student loans with Wells Fargo are co-signed by her mother. From what I've read on here, they won't allow deferrment during a 13, so they would go to default and they would go after my mother-in-law, who just retired and my wife does NOT want that to happen.

Also my wife needs some dental work done, she's been putting it off, would getting the work done help us out any on the Means Test? I'm assuming it would go in the medical section...

Telecommunications services......not home phone service, but does internet work in this section?

Thanks!

[IamOld]

Best wishes Dirk - if wife needs dental work (and possibly yuo can - if yuo ever need to "prove it" - get dds to write that she needs such and such) YES that counts.

Re internet - wiser heads then mine will comment - BUT I actually MUST have it for work (really) - high-speed/cable internet access, so I can claim it at $50/mo.

Well, after some more number crunching, if I can get some short term disability insurance for around $300 a month, and cut my hours back by 50%, I should be able to pass the means test and qualify for a ch. 7. The reason we really want to do a 7, is my wife's private student loans with Wells Fargo are co-signed by her mother. From what I've read on here, they won't allow deferrment during a 13, so they would go to default and they would go after my mother-in-law, who just retired and my wife does NOT want that to happen.

Also my wife needs some dental work done, she's been putting it off, would getting the work done help us out any on the Means Test? I'm assuming it would go in the medical section...

Telecommunications services......not home phone service, but does internet work in this section?

Thanks!

[DirkDiggler]

Best wishes Dirk - if wife needs dental work (and possibly yuo can - if yuo ever need to "prove it" - get dds to write that she needs such and such) YES that counts.

Re internet - wiser heads then mine will comment - BUT I actually MUST have it for work (really) - high-speed/cable internet access, so I can claim it at $50/mo.

Well the tooth work is because she had a tooth removed and they were going to put an implant in (I think) and now they have to actually make the implant and put it in before her teeth start moving closer together....so its kind of urgent and I would imagine the dentist would have no problem putting that in writing.

As for the internet, the position my wife is in, requires her to have internet access for VPN access, I'm guessing that's sufficient of a need? I mean its only $50 anyway, but every little bit helps!

[IamOld]

Hello Dirk - spouse here in similar situation - needed braces (and got them) because teeth were shifting and was painful to eat and even to speak...long story re missing tooth from childhood.

Implants are "nice" and expensive! As my atty always says (and some other posters too), the world of BK is upside down...that is a legitimate medical need. Period.

Re internet...yep, even $50 counts. I must(!!) can only do some of my P/t jobs online, so I have to have - as condition of employment - not only access to high-speed internet from home, but must show the employer that I have - at home - a SECOND means of accessing the internet!!! So I think your wife's need to access her employers VPN is what it is - a condition of her employment.

Well the tooth work is because she had a tooth removed and they were going to put an implant in (I think) and now they have to actually make the implant and put it in before her teeth start moving closer together....so its kind of urgent and I would imagine the dentist would have no problem putting that in writing.

As for the internet, the position my wife is in, requires her to have internet access for VPN access, I'm guessing that's sufficient of a need? I mean its only $50 anyway, but every little bit helps!

[sunshinepa]

Internet is ok. Also, don't forget pet care if you have pets, over the counter meds, entertainment and etc. You attorney should be able to help you with expenses, they know what the trustee will accept. Example - mine had my expenses much higher than the standards. He used 125.00 a month for a single person entertainment, had my food, clothing and etc. way over. I was a nervous wreck because it wasn't necessary to get me into the CH 7. According to him, trustees look at reasonable living expenses, yours should know what would be accepted.

Of course, I was below median so that may have made a difference.

Just include any/all expenses you can think of and address the rest with your attorney.

Good luck.

[DirkDiggler]

I think I just need to step back, take a breath and just get all my information to my attorney so he can run the means test and see what he says. I guess I am just skeptical of him seeing our situation and trying to put us in a Ch. 13 because he'll get more $$ that way. I don't trust many "professionals", I haven't had an alarm system put in my house because I wouldn't trust the installers who would know the master code, be able to see the contents of my house, etc. So you can see how I would be leery of an attorney (even though on our consultation I really liked him and his knowledge) LOL

Anyway I just need to get the paperwork to him and see what he says. I may just be worrying too much. I just wish we would have filed back when my wife was on disability while pregnant, but we were on the "maintain perfect credit" train

[jetsfan2010]

dont stress and worry too much, thats why you hire an attorney.

[LadyInTheRed]

I think I just need to step back, take a breath and just get all my information to my attorney so he can run the means test and see what he says.

Good idea. Let your attorney do what you pay him to do. Just make sure you review his work carefully and ask about anything that doesn't look right.

I guess I am just skeptical of him seeing our situation and trying to put us in a Ch. 13 because he'll get more $$ that way.

Attorney fees are higher for a Chap 13 because a Chap 13 takes more work. The higher fee doesn't mean the Chap 13 is more profitable for the attorney than a 7 would be. In fact, since a portion of attorney fees is often included in a Chap 13 plan, an attorney is taking more risk in a Chap 13 than in a 7. If your attorney says you don't qualify for a 7, ask questions until you understand why. If you question his advice after he has explained it to you, get another opinion. Believe it or not, most attorneys want what is best for their clients.

[DirkDiggler]

Good idea. Let your attorney do what you pay him to do. Just make sure you review his work carefully and ask about anything that doesn't look right.

Yeah, thanks....I hope this attorney knows what he's in for....all the knowledge I've gained from this forum, I could become a pain in his rear by going over everything with a fine toothed comb

[Kensington24]

Hello,

I reside in CA. I just joined and found your post. I met w/ BK attorney over a year ago. Was told at the time I needed to purchase more life-insurance, get a second car if possible, get disability insurance. I ended trying to hang on instead of filing but now reconsidering filing chapter 7. I was just offered a permanent loan modification and want to keep my home. My issue is I have 2nd (non-purchase), IRS installments and CC debt and can't keep up but not sure I can qualify now . ..when I met w/ the BK it seemed pretty straightforward what was considered into the means test and what wasn't - but I can't remember. Can you give me any insight based on what your BK attorney stated? I need to re-find one now . . .concerned about finding a decent one but don't want their time if it's lost cause . . .Thank you for any suggestions.

[LadyInTheRed]

Kensington24, to see what is included in the means test, try the Nolo means test calculator: http://www.legalconsumer.com/bankruptcy/nolo/ But, even if you don't pass it, you should consult with a couple of BK attorneys to make sure you did it correctly.

You sound like you are unwilling to consider a 13 if you don't qualify for a 7. If things are bad enough to consider BK, don't dismiss the possibility of a 13 without learning about it and discussing with a couple of experienced Chap 13 attorneys about what your plan might look like. Being in a 13 for 5 years is likely a better option than struggling with debt indefinitely. Is your home worth less than the balance of the first mortgage? If so, do you know that you could strip the 2nd in a Chap 13?

[jetsfan2010]

Lady in the Red is correct. Always get at least 2 opinions by diff attorneys regarding your situation. You might be surprised what you hear.