Unemployment and means test

[Greysky]

Hi,

I have been lurking around the forums for a while. The information here is great and I thank everyone for their knowledge.
I guess I should explain our situation starting with the back story.
We have around 90k in credit card debt, 80k second mortgage, and a 360k mortgage. House is valued at 390.
I started a business at the end of 07 and it did well until everything crashed. We used credit cards to survive on so I could pay my employees. In the end we liquidated and shut down in the spring of 09. I went back to work for another company.
At the beginning of 2012 things were looking good. We were making enough combined to knock out the credit card debt in 4 years.
In November I got laid off and have not been able to find a job to make up for the lost income.We gave ourselves until February of this year to figure it out.
We pulled the plug and met with a good lawyer who only handles BK. We are trying to do chapter 7.
I have been on unemployment since December and I am wondering how that fits into the means test? Is it calculated the same as income? With the unemployment we are averaging 7k per month. Without we are at 5.2k. 2 person household.
I am going to ask our attorney but I wanted to get some other input as well.
This is really stressful.
Thanks for your input.

[justbroke]

I have been on unemployment since December and I am wondering how that fits into the means test? Is it calculated the same as income? With the unemployment we are averaging 7k per month. Without we are at 5.2k. 2 person household. I am going to ask our attorney but I wanted to get some other input as well. This is really stressful.

Whether or not unemployment counts as "current monthly income" (CMI) in your District is specific to your District. Some attorneys will just not include the unemployment and claim that it's not part of CMI. However, your District's specific standards or precedence will determine whether it is income for purposes of the means test.

With just a 2 person household, you are probably near or at the over-the-median income for your State. You would need to check that; your attorney will check it for sure. Whether you will make a Chapter 7 will depend on your expenses. Since you do have a home mortgage, it is likely that you could qualify for a Chapter 7 based on those fixed secured expenses.

[tobee43]

as jb points out it really depends on where you are.

we are in florida and it didn't go by districts it went by counties! for an example we live in county X where you DO NOT count it, whereas, 2 miles up the road in county Y, YOU DO count it...although both counties are in the same district. what confusion!! however, our atty took a firm stance on this as it is only a temporary income and if one goes in (and we did have other atty's we interviewed INSIST it had to be counted), what happens if one gets thrown into a 13 based on that income and what happens when one has reached their max pay out from their EI...well, back to court, more atty fees and convert into a 7.

unemployment amounts vary as well. here in florida, apparently, until recently employees did not contribute and i know one atty hit the ceiling when he saw how much we were collecting from our unemployment insurance benefit. while we filed in florida, we lived and worked many years in another state. we tried to explain we have collectively worked over 90 years and have put IN to our own funds, so it's our money and that state would match it. we still was yelling about you must count this. of course we didn't hire him. he didn't even want to follow the county guidelines.

just so you know, it wasn't counted and we had no problems with our 341 or our trustee understanding it was only temporary income not via earned wages. i think here "earned" wages is the key.

[Greysky]

Thanks JB and TB. I'm in LA California. We will be filing in June. The more time I spend on this site the better I feel.

[JimKutkowski]

Just an FYI, if a majority of the debt was incurred as a result of business and not personal debt, you can exclude yourself for non-consumer debt. Just be prepared to prove it.

Hope that helps.