question about means test

[need help]

On the means test do you add your monthly car payment even if you plan to let it go back?

[SinkingFast]

Nope.

Any debt you intend to discharge in the BK does not get included in your monthly expenses.

At least that's my understanding.

[FoolAndHisMoney]

On the means test do you add your monthly car payment even if you plan to let it go back?

You are allowed to take the allowed transportation expenses for your area, but that's about it if you let the car go.

[SinkingFast]

Oh,........... Which reminds me,............. The paralegal said the day we met and turned in our docs and stuff, that they had found a way to expense out THREE vehicles, not just two.

She said it was something new. And they'd just started allowing it. And it was working. But the paralegal didn't explain how or anything. Just that there is a way to expense out the costs of THREE vehicles as opposed to the two shown on the Means Test as allowable.

Dingy me, so much was going on at the time, pulling pay stubs, and insurance papers and such as she was asking for them, I didn't think to ask how.

[need help]

when I ask about the car payment, I got my test out and looked a it I got to part 3 and the the median was more than my annual monthly income so it told me to stop that presumption does not arise. I didnot have to fill out the rest of the form. So car payment was not included.

[FoolAndHisMoney]

Oh,........... Which reminds me,............. The paralegal said the day we met and turned in our docs and stuff, that they had found a way to expense out THREE vehicles, not just two.

She said it was something new. And they'd just started allowing it. And it was working. But the paralegal didn't explain how or anything. Just that there is a way to expense out the costs of THREE vehicles as opposed to the two shown on the Means Test as allowable.

Dingy me, so much was going on at the time, pulling pay stubs, and insurance papers and such as she was asking for them, I didn't think to ask how.

And this is just for 2 drivers? 3 vehicles? Interesting.

[no_it_all]

On the means test do you add your monthly car payment even if you plan to let it go back?

B22A is called the Statement Of Current Monthly Income And Means Test Calcuations. Note the key word <current>. It doesn't say <projected> or <if the bk goes through>. Same with Subpart C: Deductions for Debt Payment, and I am quoting: The Average Monthly Payment is the total of all amounts contractually due to each secured creditor in the 60 months following the filing of the bankruptcy. Ok, so if my reading comprehension is still working it <appears> to me that if you are contractually obligated, you better list it. Note that you don't actually <deduct> the full payment of your auto loan. You amortize the remaining payments over 60 months and subtract that number from the IRS Transportation standard. The Means Test Calculations sheet is a little screwy. It helps to do line 42 BEFORE you do line 24 since you need the line 42 info for line 24..Geez! now I know why there aren't more Pro Se cases! This isn't easy!!

[SinkingFast]

And this is just for 2 drivers? 3 vehicles? Interesting.

I don't know, FAHM.

The paralegal was going down the expenses list. At appropriate places, she'd stop and wait on me to dig out whatever doc. Like the life insurance policy and bill.

While I was rifling the expandable file folder for something that came before, she and Hubby had gone on to gasoline, vehicle maintenance, etc. I found whatever doc it was she'd asked for just before that, Hubby and I were deciding on an amount for gasoline. I told the paralegal we'd spent $185/month in vehicle repairs last year. Hubby looked at me in shock like he didn't believe the amount. Then I said water pump on son's car, brakes on daughter's car, and Hubby joined in exhaust and brakes on his truck, and I said, "And oil changes for all the vehicles."

That's when the paralegal said they'd found a way to expense out 3 vehicles. She jotted down dollar amounts for gas and maint. I said I thought we'd only get 2. She said "they" were allowing for 3 now, and it's been going thru so it wouldn't be a problem. Then the paralegal moved right on to the next item on the expense list, which, of course, required some sort of doc, and we never got back to how they expense out 3 vehicles.

[aa06a47]

As my lawyer put it, right now the Bk Judges, Attorneys, and Trustees are all scratching there butts trying to figure out what is allowed and not allowed. She indicated the wording in many areas leave it up to ones interpretation. I would figure in the next couple of years, there will be alot of rulings handed down. This new law may get a little tougher down the road. (if you don't think it is tough enough now).

She even called a trustee friend of hers from a different area on a particular item in my case. She said he said he had not came across that before, but the logic seemed reasonable so she should put it down and see what happens. Guess I'll see May 11'th.

SF's lawyer found a way to expense 3 cars. How long before the creditors start filing adversarials on if the plan is offered in good faith with 3 car payments. I doubt it will be a loophole very long.

[no_it_all]

Form B22A, Statement Of Current Monthly Income And Means Test Calculator
Line 23 "Check the number of vehicles for which you claim an ownership/lease expense. (You may not claim an ownership/lease expense for more than two vehicles)

I would think that is pretty clear, but maybe the paralegal overheard something else from someone that had a brother that......oh, nevermind....

[aa06a47]

Yeah, I know what you mean no it all. But, there are loop holes I'm sure. I am not sure what the law says, but I don't think it says anything about not being able to pay secured creditors...loop hole #1. If the car is secured, then in a 13, wouldn't you be able to keep it, wouldn't you be able to keep 15 cars? If in fact what I'm saying is true, then surely down the road, there will be a ruling from the courts on this matter. The creditors lawyers will interpret it one way, while the debtors lawyers interpret it another, and the trustee will have his own opinion. A judge will decide some day in the future.

[SinkingFast]

Well ours isn't a case of expensing 3 vehicle payments. All 3 are old beaters that are paid for any way. So I'm thinking maybe the paralegal meant "expensing 3 vehicles" was gasoline, upkeep, and insurance and such for 3. Not necessarily 3 car payments.

And no the paralegal didn't hear it from someone who'd heard it from someone. The attny figured it out and run a few cases thru and it's worked. What ever "it" is.

[djk]

I would think that if only 2 of the 3 cars are being financed (if any at all) and the total operating costs of all 3 does not exceed the IRS limit then there would be no problem at all. I have no idea what the issue would be.

[FoolAndHisMoney]

I would think that if only 2 of the 3 cars are being financed (if any at all) and the total operating costs of all 3 does not exceed the IRS limit then there would be no problem at all. I have no idea what the issue would be.

This makes sense.


Also all 3 cars cannot exceed allowed states exemption. If your state allows $2000 for each car exemption then the value of all 3 cars combined cannot exceed $4000 based on kbb.

[SinkingFast]

Hubby and I are allowed $3K each for vehicles. Missouri Statutes. The Statutes don't read a vehicle, or one vehicle/debtor, or anything like that.

Also, the other day, when I called about another matter, I asked how the prep of our petition was going. The paralegal said she was working on it. And she did say, she'd gotten far enough to know that we're "no asset". So I guess we had enough exemptions to cover the value of the old beaters.