Reducing Disposable Income

[Tony R]

Just in the pre-stages of filing CH 7 Bankruptcy. Pass means test as per below median income for my area, but after schedule I and J will have $800 to $900 in disposable income. Not enough to pay the credit card bills, but plenty for Chapter 13.
To decrease my disposable income I plan on changing jobs to a part time job and going back to school half time. Will use GI bill to pay for school which will be about 500 per month for the semester half time 6 credit hours. It is not considered income as far as the IRS but not sure for bankruptcy income.

My reason for filing Bankruptcy loss of income, divorce, etc.
36000 in unsecured debt. 12000 secured debt "car Loan".

Would like some opinions and advice from the Forum.

[CATCHMEIFYOUCAN]

Just in the pre-stages of filing CH 7 Bankruptcy. Pass means test as per below median income for my area, but after schedule I and J will have $800 to $900 in disposable income. Not enough to pay the credit card bills, but plenty for Chapter 13.
To decrease my disposable income I plan on changing jobs to a part time job and going back to school half time. Will use GI bill to pay for school which will be about 500 per month for the semester half time 6 credit hours. It is not considered income as far as the IRS but not sure for bankruptcy income.

My reason for filing Bankruptcy loss of income, divorce, etc.
36000 in unsecured debt. 12000 secured debt "car Loan".

Not too familiar with GI bill/govt funded funds, however, I WAS in Chapter 13, even though the Means Test showed I had negative disposable income, schedules I and J showed I had $800. SCREWEY new laws. I was making 65g's a year. NOW that I've quit one job (because I had been working 2 full time jobs which threw me into Ch13) I refiled for Chapter 7 and am waiting discharge. So the less disposable income you have of course the better. Some people say I would have to wait another 6 months to get the lessor "snapshot," of my current income. BUT, that is not true, when one's finances change drastically like that, you have no choice, they don't make you wait, because it's obvious your financial situation dropped more than half of what was expected in the beginning.
What state are you filing in? Im filing in the Eastern District, state of VA and have a very good lawyer I can recommend!

Good Luck, Catchmeifyoucan

[CATCHMEIFYOUCAN]

Helpful

http://thebklawyer.com/thebkblog/2006/11/04/time-spent-preparing-your-bankruptcy-budget-is-time-well-spent/

November 4, 2006
Time Spent Preparing Your Bankruptcy Budget is Time Well Spent
Requests for documents and records by Chapter 7 trustees at 341 hearings are now a fact of life in the consumer bankruptcy world. No longer will standing Chapter 7 trustees rely on a debtor's best estimates - everything in your petition is fair game for review.

I am now telling my Chapter 7 clients to save their receipts for every purchase they make. Food, out of pocket medical bills, transportation expenses (including gasoline and routine maintenance), utilities, insurance costs and school sports expenses for the kids seem to be the categories that attract the most attention by trustees.

You should assume that some poor soul in your trustee's office will have the task of comparing your receipts to the figures on your filed budget (Schedule J of your petition).

If at all possible, you should start collecting receipts far in advance of filing. If it turns out that your receipts show that you actually spend $200 or $300 less each month than you think, you may find yourself facing dismissal or a conversion to a Chapter 13.

Your need to provide receipts is especially important if your household income exceeds the median and we have to run your budget through the means test. Every means test case is scrutinized by both the Chapter 7 trustee assigned to your case and the United States trustee. As I have reported before in this blog, the United States trustee is looking for a reason to push you out of Chapter 7.

I advise my clients that while I will argue long and loud on their behalf, numbers do not lie. And if I have to spend several hours poring over receipts, meeting the the U.S. Trustee, and arguing a 707 Motion to Dismiss, they can expect to spend a significant sum of money for attorney's fees.

The time to get your attorney detailed information about your spending habits and records of what you actually spend is before you actually file. I realize that this type of planning is not always possible, but if you can prepare in this way, you will save yourself a great deal of aggrevation and probably save yourself money as well.

CATCHMEIFYOUCAN

[SinkingFast]

Here's a link for you. Maybe help you remember occassional expenses and smaller things we all buy but forget about.

http://www.ca-bankruptcy-attorneys.c...alculator.html