Means Test - Can I Buy Health Ins. To Qualify?

[aquabluesrq]

I'm hoping someone might be able to answer my question.

My Question: Would the Trustee take issue with me for signing up for health insurance before filing Ch. 7?

Background Info:

My husband and I are planning on filing Ch 7, but have gambling income that is going to put us over the median income thanks to the latest changes effective Nov. 1.

**I know my husband shouldn't be gambling while we're without health insurance, but it was only one small deposit that he was able to turn into a good amount, and the ONLY recreational activity either of us engage in (no movies, shopping, birthdays, Christmas, anniversaries, etc). And don't even get me started on what a rip-off private insurance is. $250+/month AND a $10,000 or more deductible?

Unfortunately, our 2nd Mortgage holder has a judgement against us, so we're kinda backed into a corner now. We've received the Fact Information Sheet and Interrogatories sheet, so it's only a matter of time before they know EVERYTHING, and I'm super worried.

Without the gambling income we are under the median income and have negative disposable income. However with it we are dangerously close if not over the $117 /month disposable income figure. The income was "earned" in August and September, so we'd have to wait several months for one payment to fall off, and I just don't think I want to risk it.

We've been going without health insurance because we simply can't afford it right now. We've been scrimping and saving so that we can move to a less expensive place before filing and pay for the BK attorney.

I'm just wondering if the Trustee will say anything if we purchase health insurance right before we file. It's something I'd love to have and we obviously need, I just don't want to get in trouble!

Thanks!

[TBA]

this sounds like a great question for an attorney... I am not sure how obamacare might play into something like this...

[btbeme]

Two cents worth...

First, healthcare is generally considered an allowable expense. A reasonable amount of expense here is usually OK. If your numbers are close to not passing the Means Test or your "new" expenses are what keep you from having enough DMI to fund a Ch 13, you can expect close scrutiny on this and all expenses... Doesn't mean that you would "lose;" but you would have to explain and then hold your breath that the Trustee agrees with your numbers.

Second, while gambling earnings count as income in your filing, the rest of the world generally views gambling as an expense.

Know what I mean?

As a friend, please ensure that your post-BK plans would never include gambling as a means to pay living expenses. To get a better and more true picture of your income, I suggest waiting until those winnings fall off the 6 month lookback. Less to explain. More room at the margins. These are good things.

[ValleYum]

You can also lower your deductibles on your automobile insurance. You won't have a credit card to fall back onto it you need to pay a high deductible for a repair.

A small disability policy would not look bad either. And if you have no life insurance, a small term policy on each of you is also allowable.

As always, run any changed by your attorney - he knows what will "fly under the radar" on your district. Good luck!

[aquabluesrq]

Thanks btbeme and valleyum! We've decided to try to work something out so we can put off filing until the income falls off so we will be under the median income.

Unfortunately, we technically do rely on gambling as income. My husband is in the gaming industry. Lol

I get what you're saying though. Again the amount wagered was less than $200. My husband just got lucky I guess?

The only reason we are in this mess is due to a previous job loss which forced us to move. Our home lost $160,000 leaving us in the hook for the deficiency! We had pristine credit before this housing mess!

I learned a painful, but useful lesson though! Never take on debt, be it credit card, car loan, or mortgage. Debt is nothing more than a form of indentured servitude, and I value my freedom above all else! If this means driving a 10yo car and renting then so be it!

Fingers crossed we can work this out and move forward without incident! So ready to put this all behind us!

[joshuagraham]

My husband is in the gaming industry. Lol

The only reason we are in this mess is due to a previous job loss which forced us to move. Our home lost $160,000 leaving us in the hook for the deficiency! We had pristine credit before this housing mess!

I'll presume that you live in Nevada, which is a recourse state for home mortgage deficiency.