Important BK changes effective 11/1/11 for chapter 7 & 13 filers.

[mountanddo]

Would it makes sense the decreasing the median income may tip the scale for a chapter 13 into a five year plan vs. a three year plan?

[ValleYum]

There is no change in how DMI is calculated on the means test. If you can pass the means test before November 1, you can pass the means test after November 1. The decrease in median income will only force more people to complete the means test, not change whether they can pass it. If allowed expenses also decreased, then it would become more difficult to pass the means test.

Well, duh is me! And all that wasted indignation!! LOL I let my indignation lead my post before I fully thought it through.

Thanks for keeping me straight, LITR!

[HHM]

Just another unintended consequence of the means test. When the economy is down and people are struggling the most, income decreases thereby making it more difficult to get a fresh start. The means test is essentially a regressive tax on the middle tax.

[LadyInTheRed]

Would it makes sense the decreasing the median income may tip the scale for a chapter 13 into a five year plan vs. a three year plan?

Yes. It is Chap 13 filers who are currently just below median who should be running to the court house this week.

[tobee43]

Originally Posted by tobee43

you know, they are keeping these changes quiet. i know the bottom line is that too many Americans are filing, so they are changing the rules and making it more difficult for those to try to file

There is nothing to keep quite. Nobody has changed any rules. What has changed is how much money people make. No surprise there given the state of our economy.

you're right, and i think that's way makes it as sadder situation.

[Isobel]

I agree with the others who said it sounds like this is really a marketing letter using scare tactics to drum up business. I wouldn't trust this attorney - sounds like a manipulator. And if he's that desperate to drum up business, he's probably not very good... just my 2 cents!

[LadyInTheRed]

I agree with the others who said it sounds like this is really a marketing letter using scare tactics to drum up business. I wouldn't trust this attorney - sounds like a manipulator. And if he's that desperate to drum up business, he's probably not very good... just my 2 cents!

He's definitely not a very good attorney. A good attorney would not tell his clients that making over median income will make them inelligible to file a Chap 7.

[mountanddo]

Well, adding "remember you have to take a class before filing bankrupcy" really doesn't sound very professional either. If I was reviewing his emails I would at least give some sort of explanation....at least explain what kind of class and what it is for!

[HHM]

He's definitely not a very good attorney. A good attorney would not tell his clients that making over median income will make them inelligible to file a Chap 7.

Let's not be hasty in chastising the attorney, it is a VERY SMALL percentage of cases that are over median and still file chapter 7. And certainly the US Trustee position is that anyone over median is not a 7. The attorney can hedge and say that it is "possible" to be over median and still file chapter 7, but the exceptions are rare and to be fair with you, Mr. Client, you need to go in with the expectation that you will file a chapter 13 bankruptcy.

[IamOld]

Let's not be hasty in chastising the attorney, it is a VERY SMALL percentage of cases that are over median and still file chapter 7. And certainly the US Trustee position is that anyone over median is not a 7. The attorney can hedge and say that it is "possible" to be over median and still file chapter 7, but the exceptions are rare and to be fair with you, Mr. Client, you need to go in with the expectation that you will file a chapter 13 bankruptcy.

HHM, is that ALWAYS the case? Where I live many people - including myself - are above the state median - the median income for the state is about 30-40% BELOW the median for my metro area...are you trying to say that the UST, therefore, questions every single over the median filer in my district - which is many? Because atty (who's been in the "business" for 25 years) said nothing...and you've now rightly scared me :-)

Let me put it this way - if you are single, and you get the starting salary of the LOWEST paying school district in my area as teacher, you'd be over the state median.

Also, I looked up my state - median income went up by around $1,000 - rats...that would have been $83.33/mo help for me...

[HHM]

I am talking nationwide, statistically, very few cases of over median debtors remain chapter 7...but that doesn't mean in some districts, there is no variation.

Understand, there are really only 2 ways to be over median and file chap 7.
1. Non-consumer chapter 7 (business debt case)
2. High secured debt payments, i.e. have a mortgage and car payment, or other special class of obligation, i.e. child support.

I hate when I read on here people saying, so long as your expenses are high, you can be over median and still file 7, that is not true. It is only if CERTAIN expenses are high (but otherwise reasonable) that you can still do a 7 and be over.

For example, an over median debtor with regular living expenses except a $3,000 mortgage, can do a 7 if no DMI. A debtor with regular living expenses, but leases a houses for $3,000, but the housing allowance is only $1,500, will not get a 7.