Confused about median income and means test

[AngelinaCat]

What constitutes anticipated expenses?

Such as: if you know you are a diabetic (example only here), then there will be certain medical devices you must purchase each month: test strips, the tester--if needed; special foods, drugs, etc.--stuff that you know that you need each month, and must plan (budget) for.

[Pizza]

Also, beware of trying to cram a lot of 'new' expenses onto Schedule J - you may have to explain those actions. Living rent-free generally makes that a tough proposition.

If you were paying, say, $500 a month for rent before filing (at least 6 months to be on the safe side) and *needed* to buy a car as well ($300-$400 a month) you could pass. But again, if you're not willing to continually spend down this $900/mo, this strategy wouldn't work either.

Would you believe me if I told you that a 3-year Chapter 13 would be cheaper than trying to squeeze in enough expenses to prove a 7? $12,000/36 = $333.33/mo + attorney fees averaged out over that time period. And for that matter, negotiating with creditors or trying to consolidate would probably be even cheaper (and with no legal fees). Filling in the $900 gap is actually your most expensive option, looking at it on a month-to-month basis.

[olosir]

Also, beware of trying to cram a lot of 'new' expenses onto Schedule J - you may have to explain those actions. Living rent-free generally makes that a tough proposition.

If you were paying, say, $500 a month for rent before filing (at least 6 months to be on the safe side) and *needed* to buy a car as well ($300-$400 a month) you could pass. But again, if you're not willing to continually spend down this $900/mo, this strategy wouldn't work either.

Would you believe me if I told you that a 3-year Chapter 13 would be cheaper than trying to squeeze in enough expenses to prove a 7? $12,000/36 = $333.33/mo + attorney fees averaged out over that time period. And for that matter, negotiating with creditors or trying to consolidate would probably be even cheaper (and with no legal fees). Filling in the $900 gap is actually your most expensive option, looking at it on a month-to-month basis.

I'll have to research the Chapter 13 more. Here's another question: in terms of repairing my credit, what would be the difference between filing a 7, 13, or trying to consolidate or make settlements?

[olosir]

Also, just to clarify something: I've rented and paid anywhere from $500-700 per month for the past few years. I only moved in with my parents because my roommate left in May and I couldn't find anyone else to fill his place. At that point, the clock was ticking and I needed to get out of the apartment. As I mentioned before, I can't stay at my parents' for much longer. I don't think it's that much of a stretch for me to prove that I need an apartment. I can afford rent in the price range I'm used to ($900 would be too much of a stretch), and I have enough for a security deposit + first month's rent. Using the national standards calculator and assuming my rent was around $700 total, I'm only off by $200.

[Pizza]

I'll have to research the Chapter 13 more. Here's another question: in terms of repairing my credit, what would be the difference between filing a 7, 13, or trying to consolidate or make settlements?

Anything other than paying all bills on time will hurt your credit. But worrying about rebuilding credit is putting the cart before the horse. Eliminating the debt will give you the financial resources to slowly rebuild your credit.

[Pizza]

Also, just to clarify something: I've rented and paid anywhere from $500-700 per month for the past few years. I only moved in with my parents because my roommate left in May and I couldn't find anyone else to fill his place. At that point, the clock was ticking and I needed to get out of the apartment. As I mentioned before, I can't stay at my parents' for much longer. I don't think it's that much of a stretch for me to prove that I need an apartment. I can afford rent in the price range I'm used to ($900 would be too much of a stretch), and I have enough for a security deposit + first month's rent. Using the national standards calculator and assuming my rent was around $700 total, I'm only off by $200.

You would also have utilities.

Does this $900 disposable income figure in groceries, toiletries, etc.?

Also - if you get an apartment with a roommate again, you would have to include your roommate's contribution to the rent & utilities.

[olosir]

You would also have utilities.

Does this $900 disposable income figure in groceries, toiletries, etc.?

Also - if you get an apartment with a roommate again, you would have to include your roommate's contribution to the rent & utilities.

From June-present (i.e, since I've been living with my parents), these are my expenses:

Food - $300
Gym - $15
Car insurance - $120
Gas - $85
Cell phone - $100
Personal/miscellaneous (toiletries, co-pays, medical expenses, haircuts, etc.) - $200
Clothes - $75
Student loan - $235

Total: $1130

Based on the worksheet my attorney filled out, he used these figures:

Income would be ~$2150 based on the multiplier that's apparently used (even though my true take home is $2000).

He gave me these for allowable expenses:

Cell phone - $70
Food - $250
Clothing - $65
Laundry/dry cleaning - $35
Medical expenses - $30
Gas/vehicle upkeep - $240
Recreation - $115
Charitable contributions - $40
Hygiene - $75
Auto insurance - $120

His total: $1040

He did NOT include student loan payments because he said that can't be counted. I was confused about this, but I suppose he is correct. Based on what I've been reading on the National Standards, I think he's being too conservative on some of the categories. If I split rent with one roommate (say it was $600) and paid 1/2 utilities (probably around $100-120) each, that puts me around $1750 using his figures. My guess is that I could bump those up a little bit and the trustees wouldn't blink at it.

[Pizza]

It may be do-able, yes.

[olosir]

Here's another question: can you use the National Standards figures for expenses when they are HIGHER than what you actually spend? Why is my attorney assigning me random values when the National Standards are there to be used?

[LadyInTheRed]

Here's another question: can you use the National Standards figures for expenses when they are HIGHER than what you actually spend? Why is my attorney assigning me random values when the National Standards are there to be used?

You use National Standards on the means test and actual expenses on Schedule I and J.

If you don't plan to live with your parents for very long, you should be able to list reasonable rent on Schedule J. Schedule J is forward looking. If your attorney doesn't know that, tell him to read the Lanning decision. You may also want to consider consulting with another attorney or 2. If your attorney doesn't know to apply Lanning, he's not a very good attorney, IMHO.

[mlevesque308]

Hi Olosir,

I too live in RI, and I'm happy to give you my attorney's name if you want to send me a private message. My 341 mtg is tomorrow. I filed on 7/31, so I thought this was kick.

[stevie2012]

As some of you know, I was 20K over the median. However, I still qualified for the Chapter 7, mainly due to medical expenses averaging $400 a month (the allowable for my age bracket was $60/mo). It was not questioned because I had proof to back it up.

[stevie2012]

Here's another question: can you use the National Standards figures for expenses when they are HIGHER than what you actually spend? Why is my attorney assigning me random values when the National Standards are there to be used?

Yes. That is what my attorney did.