How do I determine local district standards?

[wipetheslate]

New here. Over the last decade+, I've been on the long, slow spiral to bankruptcy (student loans and consumer debt). No missed payments, no bills paid late, but I can only go on juggling for so long.

I'm weighing my options and I'd like to go Chapter 7, filing pro se. I make over the median income, so I'm wrestling with the means test. As of two months ago, I own my car outright, so no car payment.

From what I've discerned here and by scouring the web, some districts allow the $489 ownership cost even for cars that do not have a payment and some do not. The means test itself seems to allow the whole amount whether there is a payment or not (obviously if there's a payment, some of the amount goes down as priority debt versus in the ownership section on the means test).

I've also read that in some districts student loans can be used in the means test, while in others that's a no-no. I've been paying my student loans for 7+ years but getting nowhere, so I'd like to try and get them discharged plus I'd like to pass the means tests without including them. But I want to know what all my options are.

So how do I find out what is allowed in my district (Hawaii)?

Thanks so much and I'm sure I'll learn a lot from these forums.

[LuciluS]

Here is the National Standards for determining the State Median for the Means Test:

http://www.bkforum.com/newreply.php?do=newreply&noquote=1&p=294728

Scroll down to:

The original source for the State Median Family Income is the Census Bureau.
The original source for the National and Local Standards is the IRS.

You might also 'Google' your city,state and type bankruptcy after the city,state. Your specific District should have a website with a lot of information about Bankruptcies.

Also, you can look at the other websites that appear from the above paragraph and learn info specific to your district, also.

One of the forum members Debtstinks has written an easy means tests. Here is the website:

http://www.johnfire.com/meanstest/wizard.php

Hope this helps!

Luci

[wipetheslate]

I guess I wasn't specific enough. I know all the specific amounts for the means test (the website you linked is very good) and the rules on paper.

What I don't know are the general practices for the Hawaii region. The stuff that isn't 'on paper' so to speak. I, of course, have tried Googling. But it has been to no avail to find specific information.

Will the Pacer system allow me to access other bankruptcy petitions and see whether:

1. paid off cars were allowed the $489 ownership allowance in the means test;

2. student loans payments were allowed in the means test (not in deferment; payments are and have been made on time for 7+ years)?

These are the two really big questions for me.

[LuciluS]

I guess I wasn't specific enough. I know all the specific amounts for the means test (the website you linked is very good) and the rules on paper.

What I don't know are the general practices for the Hawaii region. The stuff that isn't 'on paper' so to speak. I, of course, have tried Googling. But it has been to no avail to find specific information.

Will the Pacer system allow me to access other bankruptcy petitions and see whether:

1. paid off cars were allowed the $489 ownership allowance in the means test;

2. student loans payments were allowed in the means test (not in deferment; payments are and have been made on time for 7+ years)?

These are the two really big questions for me.

Yes..you can peruse Pacer and read all about other cases in your district. I haven't enrolled in Pacer, Yet, as our filing is 9/30/09. Reading a page on Pacer costs $.08 a minute.

I'm disabled and hubby calls me an Internet Junkie LOL! So waiting until it gets closer to our filing date.

I read somewhere if the car is older than 6 years old, you are allowed a $200 ownership allowance plus maintenance and gas. Cannot recall the website tho.

Luci

[Bex]

No Help Here--Me too, me too!

Hi Slate--I'm new here, too and our stories sound very similar...except my car is 15 yrs old and I think it's a joke that someone else would get the $489 exemption just because they accrued more debt and I get NOTHING?!?! Where's the incentive for fiscal responsibility in that?

I, too, have seen mention of the full $489 on ownership--the way the allowances are structured, I find it hard to believe public transportation costs the same as owning and maintaining a vehicle, so you know the spirit of the IRS exemption was to give it--afterall, if you only pay $400 for housing, you still get the full $635 ...but I have seen mention of then $200 "tired iron" exemption mentioned above--theorizing that, with older cars you will have either repairs or replacement costs in the next 5 years...

Looking forward to answers you get on student loan debt, too--if I got both the car ownership AND my monthly loan pmt, I pass the means test easily.

If not, perhaps I'll just go buy a @#*&#% car and carry a note for the first time in my life--my son is 16 and needs a car...I need the ownership credit/secured debt liability...I need a new car for sure--mine is a sturdy old Corolla, but it definitely won't last forever and I won't want to try and get an auto loan after I file. The kind of vehicle I would buy certainly would not be considered a luxury, so I doubt I'd even have to worry about waiting to file!

How ridiculous that the system makes it so hard to do the right thing.

Anyway, looking forward to any info you get and good luck!

[bk2009]

You probably won't be able to discharge student loans, just as an FYI.

[wipetheslate]

Crazy rules, huh. I will also be looking to buy a new car if that's what I need to do. Might as well save the money I was going to spend on new brakes, heat shield, a/c, etc.

The Honda Fits look nice...but I'd rather just keep driving my paid off CR-V.

I *barely* pass the means test now by the skin of my teeth, including the car allowance. I'm probably going to get a significant pay cut (furloughs here in HI) so in another couple months my 6mo average income will be down significantly.

[wipetheslate]

You probably won't be able to discharge student loans, just as an FYI.

I know they're generally considered non-dischargeable, but my research indicates that the 9th district, which includes Hawaii, is more favorable to discharging the loans.

I've read up on the three-part Brunner test.

As I fail the means test w/o including the student loans, I can argue hardship. I've had some challenges with my current employer which have made for 'exceptional circumstances.' Plus, the worst economy in 80 years is pretty exceptional in and of itself.

I've been paying it without missing a payment or being late for 7 years, which used to be the magic number for discharge. This will help me meet the third part of the Brunner test.

If you have any advice I'd be happy to hear it.

[Bex]

Federally subsidized student loans have not been dischargable for a long time, of course, but they have to at least account for that monthly liability when calculating one's MDI--like priority debt or secured debt--otherwise the whole process makes no sense!

I'm really intrigued by this car buying idea! It can't be considered bad faith when you obviously need a car and the loan wouldn't get discharged anyway--bad faith is buying something you know your not going to be able to afford or know your going to discharge the debt on, right? But in this case, you would be *better* able to afford it after filing...

I'm planning to see an atty, this week, if possible, and I will be sure to let you know what I find out. I had considered filing pro se, but there is just too much riding on this. Truly, I don't care so much if I have to file chapter 13, it has to be done either way, but, naturally, if I can go chapter 7, I prefer that.

I started out having qualms about the morality of discharging debt that is rightfully "mine" till I recalled all the dirty tricks they have pulled that have fattened my balances and realized that I've probably already paid the value of any goods and services I received at least 3 times over!!!

Btw, Slate, v sorry to hear about your work situation. Things are going to get better, one way or another, hang in there

[OhioFiler]

We made the decision to file BK in February and purchased a new car to replace my wife's 10 year old car. We got a great rate as our credit scores were still good at that point. Now we have a dependable car for her to drive for several years.

This is a common pre-BK strategy.

[Bandit]

I'm really intrigued by this car buying idea! It can't be considered bad faith when you obviously need a car and the loan wouldn't get discharged anyway--bad faith is buying something you know your not going to be able to afford or know your going to discharge the debt on, right? But in this case, you would be *better* able to afford it after filing...

Did you double check to make sure your new car payments will be reported to all of the credit bureaus in the after-BK strategy as you rebuild the lousy after BK credit? Should you consider the pros and cons of re-affirming a car loan? if something should change, like deficiency judgments after BK if one cannot make the payment?

[Bex]

We made the decision to file BK in February and purchased a new car to replace my wife's 10 year old car. We got a great rate as our credit scores were still good at that point. Now we have a dependable car for her to drive for several years.

This is a common pre-BK strategy.

This is great info, thx! So how long before you filed was the car financed? Or does it even matter when your looking at a commuter type vehicle--just standard family transportation?

What I would like to do, since I can only have one exempt car, is buy a car for me and keep my oldie olderson and sell it to my 16 yr old son--this scenario was my plan all along before I dug my head out of my lower alimentary canal to notice that there is no way I can swing it when I'm in the hole $200/mo already...so, I suppose, rather than transferring the car and raising the red flags --even tho it's a standard "get the kid a junk car so I don't have to keep toting him around to football, school, etc and occasionally miss work" move--no red flag atall if you've ever had or been a teenager.

I guess I could make the sale to him part of the bk?? Even tho the new car would have no equity, which bites.

It only books for $1,500, so I could finance him for 60 months and not change my MDI enough to matter...not that he'd ever pay the full amount--at my strictest, I only wanted to charge him 1/2 book value.

So my question is the timing: obviously, the sooner, the better where financing is concerned--I haven't checked in a while, but I believe my FICO is still in the early 600's, but won't be before too many more reporting cycles go by! But I may be a little bit on the line with the means test--it seems less and less the more I read, but still want very much to avoid the appearance of impropriety...I could buy the car and wait to file for 90 days...maybe could keep my head above water 180--no way we'll make another year.

Sorry so verbose and thanks so much for the response--there is sooooo much to learn and I've never been blessed with a mind for finance. Heh, I just realized how much of a Captain Obvious statement that was, considering the circumstances!!!

[Bex]

Did you double check to make sure your new car payments will be reported to all of the credit bureaus in the after-BK strategy as you rebuild the lousy after BK credit? Should you consider the pros and cons of re-affirming a car loan? if something should change, like deficiency judgments after BK if one cannot make the payment?

Hmm...okay, I'm a newb here, and new to a lot of financial concepts, too, so please forgive me...so you're asking what if I file bk with a new car--and I should clarify that the type of vehicle I have in mind would be "new to me" as I would never buy a brand new vehicle for the depreciation hit (I do know that much from having been raised by a CPA!!)

...so I take on new auto debt, file/discharge/close and then something catastrophic happens and I can't make the payment? So the car goes back to the lender and they want to sue me for the gap between the remainder of the loan and the combination of what I've already paid and the resale value of the vehicle? Is that what a deficiency judgment is?

If so, thanks for the heads up--as I said a while back, I've never carried a car note before, so I didn't know they did that (tho it makes perfect sense). And it's a valid consideration, but I'm thinking the risk will be minimal on a used car (less depreciation) for which I'm planning to pay ~$200/mo AFTER discharge of $500/mo in cc and medical bills.

But I do plan to talk this over with both my CPA (DAD!) and atty--I reallyreallyreally want to do all this right and don't want to get suddenly blinded by car lust where previously there was none! I had planned to save cash to pay for this car, but the time has ticked by and the nefarious cc companies now have it all!

I don't HAVE to have a new car right this minute, my Corolla is still running like a champ, but at 15 yrs of age and 120k mi, I have to at least come up with a plan.

As to reporting to the bureaus or not--truthfully, I care not! I have used my last credit card for this lifetime and this hypothetical car loan will be the last consumer debt I incur. I already have a teensy bit of equity in my home (not up to the state bk exemption, alas!) so by the time I'm ready to sell, my equity and income will talk loudly enough to overcome any underwriter's qualms.

If I have the wrong end of the stick on any of this, please do not hesitate to educate me--I very much appreciate your time and expertise!

[Bex]

Hey Slate!

I downloaded a trial of that "Best Case" bankruptcy software and ran the 22c with both my old car and a new one.

It automatically filled in the full $489 ownership standard on the paid-off vehicle, so that must be fairly common...I will let you know if I find anything further.

Oh, the other thing it did for me was show me that I was not including my student loan debt in "total non-priority, unsecured debt" which changes the picture a bit, too.

If nothing else, this process has shown me how ignorant and weird I am about money--I guess since I've always known my student loans (some subsidized, some not) were not dischargable, I just put them out of my mind after I refi'd them to 4.25% interest many moons ago. DUH. I kept wondering "how do these people even manage to get INTO these giant sums of debt--I can't even live with my paltry $13k!" Um, yah, that's $30k, not $13k!!! Still probably modest, compared to a lot of folks, but it ain't chump change, that's for sure.

[Bex]

Hey Slate! II

Oh yah, sorry about hijacking your thread