Over Median--this 25% thing of your income over 5 years thing

[moe]

They definitely get you coming and going if you are over median in Chapter 7.

I just discovered this new wrinkle regarding the means test:

http://www.totalbankruptcy.com/chapter-7/requirements/means-test.aspx

If your disposable income is greater than $10,000 over the next five years, a presumption arises that you don't really need to file for Chapter 7 bankruptcy and you may only be allowed to do so if you can demonstrate special circumstances.

In the gray area between $6,000 and $10,000, yet another calculation is often required.

This one compares your disposable income over the next five years to a percentage of your unsecured debt to determine whether any significant repayment to your creditors is possible.

If your disposable income over that five years is greater than 25 percent of your unsecured, non-priority debts, you'll probably find yourself in the same circumstances as if you'd had more than $10,000 in disposable income.

If your disposable income over a five year period is less than 25 percent of your unsecured, non-priority debts, you will likely "pass" the means test.

So that might leave me out of Chapter 7. I am over median and my disposable income over 5 years would probably not fit this so well.

I DON'T KNOW. Brain shortage. All I know is that every time I think I sort of understand things, I find out new things. It's actually sort of interesting--and yet horrible.

[moe]

Actually, I just realized this might not be a problem for me. But I'm leaving it up because I learn a lot from previous posts and it is something I didn't come across previously.

[ValleYum]

Awww Moe, just to blow your mind even more - those dollar amounts are out of date.

This is how I see it:

On Line 50 of the Means Test (form B22A), you need to shoot for an amount under $117.08 - then you don't have to worry about the '25% test'.

If your Line 50 amount is between $117.08 and $195.41 you will need to utilize that '25% test' you mention.

If you are at $195.42 or above it's pretty much Chapter 7 game over.

If you exceed the amount of $11,725 ($195.42 x 60) on Line 51 you can't continue to the secondary (25%) presumption determination. That '25% test' only applies if your Line 51 total exceeds $7,025 ($117.08 x 60) and is $11,725 or less.

If you need to use the secondary (25%) presumption determination - you put the total amount of your unsecured debt (credit cards, signature loans, etc.) on Line 53. Multiply this number by .25 to compute the amount to enter on Line 54.

If the amount on Line 51 is smaller than Line 54 - you pass - the presumption of abuse does not arise.

If the amount on Line 51 equals or is larger than Line 54 - you do not pass - the presumption of abuse does arise.

The ultimate "last chance" to rebut the presumption of abuse would be to put expenses on Line 56 that are required for the health and welfare of you and your family and that you contend should be an additional deduction from your current monthly income. If these are bona fide expenses, they might allow the US Trustee to see that you truly can not afford payments in a Chapter 13. They could also consider the cost of the monthly administrative expense of a Chapter 13 which is shown on Line 45C (basically it is Line 50 multiplied by the current district multiplier found here: www.usdoj.gov/ust/).

I hope that helps you - it did help me to look at a printed (hard) blank copy of the Means Test - sometimes it is easier to actually see it rather than viewing it on the screen of an online calculator. I kept a blank one and I filled one in using the numbers derived from the calculator and it helped me grasp things so much better.

ETA: I just saw you posted that this may not apply to you. I will leave my reply up so it hopefully can help another forum member.

[moe]

Wow, this is blowing my mind. How the heck will I ever master this information?

I google a lot and I pick up things here and there. I genuinely enjoy reading the court decisions. I wish I knew the titles--there is one about a couple of doctors trying to declare Chapter 7. They have giant incomes and the judge comes down really hard on them.

There's another with a guy who was flat broke for so long and lots of debt and got a job--but older and wants to retire someday. He was out of luck.

There's a million stories in the naked bankruptcy court I'm sure.

I love your user name. I could use some valleyum just to get through this debacle.

[daylate]

Moe-just keep reading and researching. Your frustration is not alone-I think all of us started out clueless but through research, reading, discussing, etc. gained at least enough info to become knowledgeable enough to get by. And one other thing in talking to attorneys, make sure you talk to as many as you can, compare answers and use the forum for clarification whenever you get conflicting answers(which happened to me much more than I expected). Good luck.

[moe]

Thank you daylate.

It's really a huge bummer that this happened and I keep looking for a solution that doesn't involve this. And it's just kind of weird the way it works where it is so hard to get by in Chapter 13. So bankruptcy seems like a bad solution too. And there is this presumption that you are a bad person if you actually sit down and think about how to make it work so that you can actually feed and house your family going on into the future. So what do you do? It just seems like there are no options. You just have to learn as much as you can. Also, it drives me kind of nuts to make decisions when I don't know what I'm doing. I have to really understand things deeply or I kind of freak out. I'm glad I'm past the point where I was hoping my plane would crash so my life insurance policy would kick in and my family's problems would be solved.

My previous choices weren't like the 'I bought a powerboat' bad decisions. Not that this matters at this point! But I think we know we aren't bad people but damn, I feel so guilty. I'm just trying to look at it as a technical problem at this point. Basically, I have no disposable income to speak of and so I rent out rooms in my house but 5 people, 1 bathroom and 2 of them not our family in 1500 square feet is not a real solution. So I have to figure a way out. Seriously, if I could donate a kidney I would--but they don't pay that much for kidneys on the black market! I thought of joining the National Guard but I'm too old.

I so appreciate your kindness and the kindness of everyone on this board!!!

[ValleYum]

It just seems like there are no options. You just have to learn as much as you can. Also, it drives me kind of nuts to make decisions when I don't know what I'm doing. I have to really understand things deeply or I kind of freak out.

I am exactly the same way. I studied this board, quizzed my poor lawyer and researched like crazy until I was *comfortable* in my knowledge and felt as though I could file as an educated bankruptcy consumer. One day, it just seemed as though the words and procedures just clicked for me - it was my BK epiphany, so to speak.

I feel confident that you will have your BK epiphany, too. {{{hugs}}} I did ask my doctor for a mild anxiety pill during our BK - she didn't give me valium (LOL) but the pill she gave me sure did help to slightly chill me out during all of our BK process. <--- See? Frogger has me calling BK a process not an event! He has another convert!!! Woohoo!! LOL

Hang in there, Moe. Feel free to PM if you need to vent!

[LadyInTheRed]

Moe, you don't have to "master" this stuff. That's what an attorney is for. Educate yourself the best you can and then find a good attorney to guide you through these details.

If it does turn out that you can't do a Chap 7, a Chap 13 doesn't have to be as bad as you seem to think. A good attorney will help get you a liveable plan.