Please please help! Motion to dismiss. Trustee wants to convert to ch 13 :(

[mslaw]

When we filed we knew we were over median because of dh's bonuses. However we noted that his bonuses are never guaranteed hoping that would be enough. Unfortunately, we were told today that we have a court date in october to dismiss our case and that the trustee will want to discuss a ch 13.

After we filed I was terminated at my job. Of course my job salary was included in the bankruptcy numbers. Since then I have not been able to find a job and there are not many to be found in my field. My dh makes 85k a year but we have 5 kids! I am at a loss. Devastated. I don't know what to do.

[mslaw]

We do not have the money to fund a CH 13! What will they want us to do? I was so ready for this to be over. We were within 3 weeks of being 60 days from our first 341 meeting. This feeling is horrible. It's like the nightmare will never be over.

[Pandora]

It appears that the income for a family of 6 in KY for a Ch. 7 is roughly $79558 - so your husband is already over. Does that 85K include the bonuses you mention or is that straight salary? What does your DMI show available? Does Lanning come into play? (all things lawyer should've gone over with you prior)

I know you've had issues with your lawyer, 341 meeting, etc - but - it begs to question why on earth your lawyer didnt go over all of this with you prior to even filing when he orig. thought presumption of abuse was there? Doesnt sound like a very good lawyer

Hope you can get this all worked out....that sucks

[mslaw]

We are a family of 7. We are married and have 5 kids. And yes that includes bonuses. That was what he made for the year 2012. It was less in 2011. Who knows in 2013.

And yes, I'm not overly pleased with our attorney either.

[Pandora]

My error - I think I did 6 people - so 7 would bring it to a bit over $87K for the means test - therefore you pass if that $ includes bonuses.

Have you talked with your lawyer directly and asked why the trustee is saying there's presumption of abuse? Something isnt adding up - if you lost your job, then that gets factored in but you need to wait for it to drop off (6 month issue). I think a phone call is needed and paperwork gone over with the new numbers.

hang in there - this could just be a minor glitch due to not updating income

[mslaw]

I think that's the biggest issue. My small income before my job loss was on there. I made around 25K per year so it wasn't a huge income but it pushed us over and did make things more comfortable for us monthly. Now I do not have it. My kids are homeschooled. This was a part time job that I could work into our schedule and now I can't find one. I may not be able to at all.

I just do not understand why or how this UST is doing this. We are not abusing anything. Even on paper, we stated my job loss because it happened before our 341 meeting. With the loss of my job, we were below median income.

We can't fund a 13 so I don't know what to do.

Thank you for the replies, I really really appreciate it.

[Pandora]

Ok -just looking back through your past posts.... and found this one (pay particular attention to momofthree's post)

how does your income to debt ratio look w/out your income? is everything else still the same - other than income loss? It appears that it may be the IRS standard of rent vs. mortgage (since you're letting the house go). I'd STILL rework all the numbers based on you not having income - but you still have to let it fall off the 6 month window.

http://www.bkforum.com/showthread.php?77023-putting-it-all-out-there-Here-s-our-situation

you could still be a Ch. 7...

ETA: you're not including student loans are you? they go into deferment - so if you are, that will free up quite a bit of $ to fund a 13.

[mslaw]

Yes everything else is still about the same. Only we also have about $200 month in homeschool curriculum not included there. And we bought another van (per advice) before we filed. Which is more expensive a month. And we honestly cannot afford now. It's a new van and because of bad credit, our payment is excruciating at $600 a month. We are giving back the 5 year old van.

So, what do we do? Go to the October meeting? Be dismissed? And then wait 6 months to file again? OMG I may kill myself. This is awful. What happens with all our creditors during that time?

Thank you again.

[oregongal]

We homeschool too, but cannot figure out a way to include our expenses. I am curious how the trustee will look at that...any ideas?

[Pandora]

Ok - so that means that you havent reworked the numbers.

1. are you keeping your house for BK filing purposes (then letting it go afterwards as suggested in p.post) - or are you going to claim the IRS standard for rent? There's a huge difference in monetary amounts between the two = DMI available.

2. Student loans - cant count them.

3. medical: have you included all copays, OTC meds, deductibles, etc? (again you may need proof).

4. any pets?

5. gas is pretty high right now - $4 gallon - adjust accordingly

6. I believe IRS standards for food, clothing, etc has been increased for filings after may 2012.

7. schooling needs to be included but you must be able to prove you spend that each month.

8. piano lessons of $160 per month- that might be tricky since you homeschool. Trustee may include that in "entertainment" - but also may include it in schooling since you homeschool.

9. Personal property taxes - do you have them?

[Pandora]

Remember -means test is only part of the equation; Schedules i & J are the other part. You can be under median and still end up in a Ch. 13..... - or you can be over median and still get a Ch. 7. It's crazy.

I'm sure if you post your numbers (monthly expenses) forum members will chime in on what they see that could be the issue. it's kind of hard to do using old numbers if you've had some things adjusted (i.e., new car payment).

[mslaw]

There are education expense allowances for dependent children.

[mslaw]

Ok - so that means that you havent reworked the numbers.

1. are you keeping your house for BK filing purposes (then letting it go afterwards as suggested in p.post) - or are you going to claim the IRS standard for rent? There's a huge difference in monetary amounts between the two = DMI available.

2. Student loans - cant count them.

3. medical: have you included all copays, OTC meds, deductibles, etc? (again you may need proof).

4. any pets?

5. gas is pretty high right now - $4 gallon - adjust accordingly

6. I believe IRS standards for food, clothing, etc has been increased for filings after may 2012.

7. schooling needs to be included but you must be able to prove you spend that each month.

8. piano lessons of $160 per month- that might be tricky since you homeschool. Trustee may include that in "entertainment" - but also may include it in schooling since you homeschool.

9. Personal property taxes - do you have them?

We can't keep our house. We are too far behind on payments. It's too late at this point for us to catch it up. It would be thousand(s!!).

We ended up not including our piano lessons for the original BK filing. But we also weren't homeschooling at that time so we didn't include that $200. I just ordered their curriculum for the year which was 2500. Alot I know but we have 4 in different grades and one is in middle school. So it breaks down to about $200 a month. I can show the receipt for the order placed. It will last them throughout the 2012-2013 school year and then I'll have to replace it in next fall. It is still cheaper than sending our 4 to a private school.

We have personal property tax on our van but it's new and I don't know how much that will be yet. We bought it in July.

[Pandora]

let's try this another way

you said you were a few months behind in your mortgage back in June - not sure how many thousands you're referring to, however, you're not paying your unsecured creditors - so you should have $ there to catch up the mortgage. ????

Homeschooling: if you werent homeschooling when you filed - and just started now (meaning Aug / Sept 2012-13 school year) - then you need to ask how that calculates into your schedules / expenses. I'm sure you get X amount allowed, however I dont know if the Trustee will require a paper trail for X months in order to claim expenses or not. Maybe someone else that homeschool's can chime in.

In all earnest, you need to re-do all the numbers, schedules, etc - with everything you have currently as expenses - but keep in mind you cant include certain things and must include others. one thing to consider is if you're not paying unsecured creditors nor the mortgage and you STILL dont have $ - then you really need to look over everything with a fine tooth comb.

Worse case scenario - you pay into a Ch. 13 your secured items, trustee fees, and lawyer fees with the least bit going to unsecureds. There are some in 13's that have 0% to unsecured creditors; they are few and far between, but it does happen.

[despritfreya]

Ok, I have not read all the posts but Pandora began on the correct track. There is a simple solution.

Median income for a family of 7 is $87,058.00 in Kentucky. You had to "qualify" when you filed not sometime thereafter. Your income is now below median. The easiest way to deal with this issue is to agree to let the case get dismissed and, once your 6 month window works, file case #2. I have used this approach several times in “taking over” cases. Just easier and cheaper to deal with case #2 then to fight over case #1.

Des.