New Income Limit for Means Test - Effective 11/1/10 - Ineligible for Chapter 7

[dasmom]

Thanks to this forum I was able to find out that the income limit for the Chapter 7 means test is decreasing effective 11/1/10. If it wasn't for this forum I would be screwed. Here's why:

I am very close to the income limit for the Chapter 7 means test that is in effect through 10/31/10. My attorney advised me to let him know if there were any expected changes in my income so that we could file before my income goes up.

Haven't filed because it would stop all state court action, which my bankruptcy attorney believes includes the state mandated foreclosure mediation. Bankruptcy attorney was recommending that we wait for the mediation to finalize, in case loan modification could be agreed on. (Note: I have been trying to work something out with the bank for over 2 years)

I called the attorney today after reading on this forum about the change that will be in effect on 11/1/10. Attorney stated that he was not aware of any changes in the income limits and that the court would have notified him if there were any changes pending. I told him the new income limit and he said, "It can't go down that much". I offered to send him the link to the federal website. Shouldn't he know this? Isn't bankruptcy law supposed to be his specialty? (Attorney's fee was paid in full months ago)

Not 2 minutes later, the attorney calls back to tell me that I am right and he won't be able to file chapter 7 effective 11/1/10. I had to ask him about filing before then and he seemed really put out by my request, but will be meeting with me before the end of the week to sign the paperwork so he can file.

I will be glad to get this entire process behind me. I have been screwed by 2 foreclosure defense attorneys, 2 bankruptcy attorneys, 3 HUD agencies, NACA, and the banksters.

It is time to more on now...

Thanks for listening to my rant,

dasmom

Lesson Learned: Be Your Own Advocate! Stay Informed!

[LadyInTheRed]

Good for you for being persisitent! Too many people are afraid of pushing their attorneys to do what needs to be done. Keep staying on top of him. The fact that he does not stay up to date on changes relevant to his clients is not a good sign.

[dasmom]

Thanks, Lady

I definitely will not refer anyone to him in the future.

[JEM]

I just want to say one thing...being "close" to the median income--as in right over-- does NOT mean you cannot file for Ch7. We are going to be right over, and our attorney sees no reason that we cannot still file for a Ch7. If your attorney is going strictly by the fact that you are over the median income for your area, maybe you should continue to interview attorneys.

Again, just wanted to throw that out there.

[ccsjoe]

Couldn't agree more JEM. Being over median does not mean you're excluded from 7. I am almost 17K over median and filed 7.

[debee]

Us too - over the median but passed the means test.

[lfllffl]

Me too... over the median, just discharged this week...

[platter]

Even though over the median, it's the expenses that one comes up with that enables them to offset that, right?

[tobee43]

Even though over the median, it's the expenses that one comes up with that enables them to offset that, right?

not us!! under and under...........which means under the radar!! LOL

good luck dasmom....hope he filed it for you!!!!

[LadyInTheRed]

Even though over the median, it's the expenses that one comes up with that enables them to offset that, right?

Sort of. I wouldn't say the "expenses that one comes up with." It's the allowed IRS expenses and some that can be your actual expenses. You fill out parts II through V of the means test to determine if you have enough DMI to create a "presumption of abuse." If there is no presumption of abuse, you can file Chap 7. But it is still possible the trustee will object based on a totality of circumstances if he/she believes you have sufficient income to pay something to your unsecured creditors. This might happen if your income increases after the 6 month look back period. Not sure what else would cause it.

[platter]

No, there's no doubt there's no way to pay anything. The consult yesterday said that I'm okay.

Of course I imagine the income is going to change later ... what do you mean by *6 month Lookback Period?*
I've seen that mentioned in threads but never grasped the meaning.

[tobee43]

No, there's no doubt there's no way to pay anything. The consult yesterday said that I'm okay.

Of course I imagine the income is going to change later ... what do you mean by *6 month Lookback Period?*
I've seen that mentioned in threads but never grasped the meaning.

please platter...do not be afraid...some people get their jollies being vague and making statement that are out of context...i.e. looking back on what cc charges you made etc. as well, the means test usually has a 6 months indication of what your salary was etc.

simply speaking...when you file your petition it will usually contain 6 months worth of your bank statements pay stubs, etc...normally two years of your 1040...also most question relative to the filing draw a two year minimum ...with respect to..."have you within the past 2 years of filing this petition transfer a deed" blah blah...

the trustee reaches a view based on the totality of your submission and the information you provide. better yet, the atty your working with will let you know if there are possibly any "red" flags...you'll be fine..

[platter]

Right, I'm aware of all that has to be submitted, etc. (I don't have anything that has been deeded, etc., so that doesn't worry me. I'm a no assest.

But what caught my eye is in the following quote stating increases *after* the 6 month look back. Maybe I'm thinking that she meant after the 6 month after actually filing the BK and *during that period of waiting for a discharge* that one's income rises due to new job, etc. I'm going to remain on unemployment benefits but say, if my husband returns to work in December and I've just filed on December 1st...then in that waiting period there'd be more money. Oh, my mistake, the atty in the consultation, did answer that question. He said that he'd have to make a lot of money to throw us off. (Maybe that's what LadyInRed meant. If so, I understand it better now.)

From LadyInRed's #10 comment.

...if he/she believes you have sufficient income to pay something to your unsecured creditors. This might happen if your income increases after the 6 month look back period. Not sure what else would cause it.

[tobee43]

Right, I'm aware of all that has to be submitted, etc. (I don't have anything that has been deeded, etc., so that doesn't worry me. I'm a no assest.

But what caught my eye is in the following quote stating increases *after* the 6 month look back. Maybe I'm thinking that she meant after the 6 month after actually filing the BK and *during that period of waiting for a discharge* that one's income rises due to new job, etc. I'm going to remain on unemployment benefits but say, if my husband returns to work in December and I've just filed on December 1st...then in that waiting period there'd be more money. Oh, my mistake, the atty in the consultation, did answer that question. He said that he'd have to make a lot of money to throw us off. (Maybe that's what LadyInRed meant. If so, I understand it better now.)

From LadyInRed's #10 comment.

ahhhhhhh ...yes platter, we unfortunately, get so stressed during this time that we sometimes just read things a bit tilted...no...i'm certain lir didn't mean that........unless of course, the morning of your 341 you just found out you had a long lost aunt that just left you 5.9 million dollars!! LOL! and if that's the case........your buying dinner.....in paris for the entire site!!

i just don't want you to worry needlessly...and if you feel confident in the atty you have hired, we sometimes just need to roll it on over...

[LadyInTheRed]

Right, I'm aware of all that has to be submitted, etc. (I don't have anything that has been deeded, etc., so that doesn't worry me. I'm a no asset.

But what caught my eye is in the following quote stating increases *after* the 6 month look back. Maybe I'm thinking that she meant after the 6 month after actually filing the BK and *during that period of waiting for a discharge* that one's income rises due to new job, etc. I'm going to remain on unemployment benefits but say, if my husband returns to work in December and I've just filed on December 1st...then in that waiting period there'd be more money. Oh, my mistake, the atty in the consultation, did answer that question. He said that he'd have to make a lot of money to throw us off. (Maybe that's what LadyInRed meant. If so, I understand it better now.)

From LadyInRed's #10 comment.

Yes, sort of what I was talking about, but not exactly. I was talking about what actually appears on your schedules when you first file. If there are changes after you file, that may also trigger an objection based on totality of circumstances, but I'm not positive. From what your attorney says, it sounds like it is possible if the change is significant enough.

The 6 month look back I was referring to is the 6 months before filing that is included on the means test. If a debtor's Schedule I shows that income looking forward would be higher than the 6 months on the means test, the trustee could object to a chapter 7 because the debtor now has enough income to pay to secured creditors.

It doesn't sound like that is an issue for you.