$800 Disposable Income...A problem?

[pv34pv3p]

Been lurking here for a while...Picked up some really good info, and would like to know if anyone got hassles from a trustee for having $800 a month disposable income.

Lawyer seems a little squeamish...wanted to know if I had a 401k...Since I haven't had this job long enough to participate I don't...Next month I can enroll...but I gotta file this month to give the means some wiggle room...

He says it's all about the last 6 months, and that the trustee might not take future participation into consideration...

Any ideas, or experience greatly appreciated.

Filing in FL if it matters...

pv34pv3p

[SinkingFast]

Some Courts allow for participation in 401K and some don't. Generally Courts that allow participation only allow a small %'age. 5% or so.

If your attny is telling you this in advance, sounds like your Court allows for 401K savings during BK.

Also, the Court is supposed to take into consideration anticipated increases or decreases in income.

You could plead an anticipated reduction in income due to decreased hours and possibly win that. Like your company is cutting out all overtime hours.

I doubt a Trustee is gonna bite on you lining your own retirement savings at the expense of his/her pocket and the Creditors wallets.

[FilingOnMyOwn]

$800 a month in disposable income is quite significant, lol. May I ask, why on earth do you need to file?

[pv34pv3p]

Guess I didn't make it clear...the 800 would be after filing if not pushed into 13...

And, yes...I could prolly survive ok on that...

Thanks,

pv34pv3p

[spongenotbob]

Been lurking here for a while...Picked up some really good info, and would like to know if anyone got hassles from a trustee for having $800 a month disposable income.

$800/month is a MAJOR problem, like to the tune of $750 too much.

[SinkingFast]

$800/month is a MAJOR problem, like to the tune of $750 too much.

Yep, Yep, Yep!!

New BK Law,........... In excess of $166/mo of disposable income and over the Median, you are gonna be a Ch 13.

You wanna shoot for less than $100/mo. Negative to be on the safe side.

That's why your attny was so squeamish about it. That's a sizeable Ch 13 payment. Prolly for 5 years.

[pv34pv3p]

I'm under the median...about 900 a month negative...and a third of my income is military retirement...

With 401k contributions and a medical supplement policy that I forgot, I'm around 600...Last couple months of overtime is coming to a halt per corp policy, which would drop it another 200.

My expensess are actual, but if the IRS numbers are used and the above is considered I'm down to around 150...But the Lawyer seemed to discount the IRS numbers...

Guess we'll see...

Thanks

pv34pv3p

[FoolAndHisMoney]

How much debt do you have? With $800 disposable income you can clearly work out a plan. I wouldn't even look into a chapter 13. If you don't mind damaged credit (which bankruptcy will give you anyway) you can stop paying your unsecured debts and in 6 to 8 months most of your creditors will know you are seriously broke and will negotiate a settlement. You can reduce your monthly payments and eliminate the interest and fees and avoid bankruptcy. Trust us if you can avoid this in anyway then avoid it.

[spongenotbob]

My expensess are actual, but if the IRS numbers are used and the above is considered I'm down to around 150...But the Lawyer seemed to discount the IRS numbers...

Personally I think you may be getting some iffy advice from your lawyer. Have you tried getting another consult from another attorney?

Best of luck to you.

[SinkingFast]

I'm under the median...about 900 a month negative...and a third of my income is military retirement...

With 401k contributions and a medical supplement policy that I forgot, I'm around 600...Last couple months of overtime is coming to a halt per corp policy, which would drop it another 200.

My expensess are actual, but if the IRS numbers are used and the above is considered I'm down to around 150...But the Lawyer seemed to discount the IRS numbers...

Guess we'll see...

Thanks

pv34pv3p

We're under the Median too. Just using the IRS allowables, our attny has us at $75/mo disposable income.

As suggested by Sponge,........... Have you Consulted other attnys?? If not, you might want to.

Under the Median, the Means Test, stops at Line 6 or 7. No Presumption of Abuse. Are you showing $800/mo disposable on I vs J??

[pv34pv3p]

Yeah...My lawyer isn't exactly the most talkative person I've ever met...

Anyway...with a 60/60 plan, 401 k contribution, and IRS expense numbers I'm somewhere around $30 month left over...

I guess I'm confused with the retirement income exemption...

It's exempt but still figures in to net income? Gotta wonder what the point of the exemption is...

I'll definately get him on the phone tomorrow...

Thanks

pv34pv3p

[SinkingFast]

OK,............ Now I know what's going on.

Your retirement income is added in at the start. Just like SSI or SSDI would be. But those sources of income are Exempt for purposes of BK. Sooooooooo your Retirement is being deducted back out, totally, later on, further down on the Means Test.

Even tho, at the start, you look like you have excess income, you don't really, due to the Retirement being considered Exempt.

[Fedler]

Whether it's exempt or not when filing bankruptcy, you're still free to use it to pay off your debt. Don't be talked into filing just cause you can.

[pv34pv3p]

OK,............ Now I know what's going on.

Your retirement income is added in at the start. Just like SSI or SSDI would be. But those sources of income are Exempt for purposes of BK. Sooooooooo your Retirement is being deducted back out, totally, later on, further down on the Means Test.

Even tho, at the start, you look like you have excess income, you don't really, due to the Retirement being considered Exempt.

I get the impression he's not deducting the retirement income back out. If he did I'd be WAY under the median income. Even with it I'm under...

As far as expenses go according to the IRS allowables I'm at 2519, with a "job" gross income of around 2350...

If the Lawyer is deducting the retirement income, I can't figure his getting sqeamish over expenses...

I guess all I really need to know is if retirement income is truly exempt and not factored into net income... If so...I will end up with 800 disposable income...

Confused yet?

pv34pv3p

[SinkingFast]

Bump