Means test help

[Jf24]

I completed the means test and came out -$240 with default numbers for things such as housing and utilities and food and clothing. I guess robbing Peter to pay Paul is keeping us afloat.

A few questions.

It says I pass means test. Does this mean I qualify for ch7?

20B Housing and utilities; mortgage/rent expenses seems tricky to me. Mort allowance is $2235. My first and second combined is $2520. Should I be entering the difference of these 2 amounts in line 42a? I entered the full $2520. Just want to make sure i did this section right.

I am married filing separate. My wife has a child and gets child support. I didn't enter it. Does it have to be entered.

We have no car payments but one car is on the way out. Car payments before we file will put us more in the minus. Is this good or bad?


Made a big mistake in line 23 Vehicle Ownership or Lease Expense. I hit 2 cars here and have no car payments. Boostd it up by $496 per car. Taking this out we have $720 left over and not eligible for ch7.

[LadyInTheRed]

I completed the means test and came out -$240 with default numbers for things such as housing and utilities and food and clothing. I guess robbing Peter to pay Paul is keeping us afloat.

A few questions.

It says I pass means test. Does this mean I qualify for ch7?

Not necessarily. It means there is no presumption of abuse. However, the trustee can still try to prove that the granting of relief under Chap 7 would be an abuse of the law by showing that you have enough disposable income to pay a substantial amount of your debt in a Chap 13. This might happen if your actual expenses on Schedule J are not as high as allowed on the means test or if you have received an increase of income that doesn't show up in the calculation of your average income over the last 6 months. I am sure there are other things that could cause an objection, but these are examples that come immediately to mind.

20B Housing and utilities; mortgage/rent expenses seems tricky to me. Mort allowance is $2235. My first and second combined is $2520. Should I be entering the difference of these 2 amounts in line 42a?

No

I entered the full $2520. Just want to make sure i did this section right.

You should list one mortgage on line 42a and the other mortgage on line 42b so that total for line 42 is $2520. Since the total of your actual mortgage payments is more than the allowance, your net expense on line 20C is zero.

I am married filing separate. My wife has a child and gets child support. I didn't enter it. Does it have to be entered.

It should be entered under line 8, column B. You are including the child in your household size, right?

We have no car payments but one car is on the way out. Car payments before we file will put us more in the minus. Is this good or bad?

Made a big mistake in line 23 Vehicle Ownership or Lease Expense. I hit 2 cars here and have no car payments. Boostd it up by $496 per car. Taking this out we have $720 left over and not eligible for ch7.

Yep. If you don't have a car loan or lease payment, you can't claim that expense. You may want to consider financing a car before filing. But, only do so if you can afford the payment after your unsecured debt is discharged. And make sure any trade in/down payment doesn't leave you with equity in excess of your vehicle exemption.

[Jf24]

If I claim 3 on taxes do I have to enter 3 on the test or can I enter 2 and leave out the child support?

[LadyInTheRed]

If I claim 3 on taxes do I have to enter 3 on the test or can I enter 2 and leave out the child support?

From Committee notes for the means test instructions:

In order for Forms 22A and 22C to reflect more accurately the manner in which the specified National and Local Standards are applied by the IRS, the references to "household" and "household size" are deleted, and the substituted terms – "number of persons" and "family size" – are defined in terms of exemptions on the debtor's federal income tax return and other dependents.

Sound like you should enter 3 on the means test.

[justbroke]

You can't exclude any income! The whole purpose is to specifically determine whether you are deserving of a Chapter 7 discharge and what you can afford to pay in a Chapter 13. You don't get to choose which income to include or not include.

Lady has provided very great detail on your questions. We'd be happy to answer additional questions and even get into some more discussion. Unfortunately, the expenses that you double counted (mortgage/rent expense) and the exclusion of the income from child support, this may put you into Chapter 13 territory. Only looking at the numbers more closely will yield some answers.

Have you tried a few consults with some attorneys in your area?

[Jf24]

Have you tried a few consults with some attorneys in your area?

I saw one so far that was recomended by 2 friends. This was before first post on this thread. He didn't want to get very far until I got a free evaluation from a real estate agent and let him know what it is. He said if it comes in lower than my first mortgage he wants me to get a certified appraisal. This is to strip the 2nd motgage. The eval came in $30,000 less than first motgage.

He said he will give me a second free consult since the 1st was on the short side. I just did the means test myself online to give me an idea where I may be. Here is the problem. Wifes X is kind of a deadbeat. He gives what he can most of the time. He has a business that is not doing well. He is often behind and if included in DMI where do we stand. I thought about not even including it because he gives her cash and i'm filing by myself. But will mention it to the lawyer.

[mountanddo]

I thought about not even including it because he gives her cash and i'm filing by myself. But will mention it to the lawyer.

Is there a legal child support order?

[Jf24]

I belive there is. I have to drill more info from wife on it.

[Jf24]

Think I solved the child support problem. I did both means test and form 22c and both want child support received entries but the 22c has a deduction for it at the bottom line 54. So that's a wash. My understanding is means test=ch 7 or 13 and form 22c=how much DMI, correct?

Just to clarify, you can only strip 2nd mortgage in ch 13. If so, even if I would some way qualify for a 7 I should do a 13 if I want to strip it? Better to pay for the next 5 years in a ch 13 plan than the next 16. Should I stop making payments on the 2nd? I stopped cc payments. Actually got my first call today.

Means test and form 22c came out only about $10 difference (not putting child support in means). Over $700 per month DMI. This I have to get lower. One thing I couldn't figure out is line 50 to get the admin expense. But seems like a wash when all said and done.

Few more questions for form 22c
I get 10% VA disability. I assume this is included income. I put it on line 9, Income from all other sources?

Is car insurance included in vehicle local standards or is there a separate line?

Where would cell phone bill go? Heard in another post contract would be terminated. I need these phones.

Insurance and cell would drop DMI down some.

Married filing separate. On line 13, Marital adjustment I put $265. $150 for a credit card in her name, her only one and this payment is not the minimum, it's the recommended one she pay to get it paid in 5 years. She has been paying it this way for many months. Will this payment fly? Also 30.00 for weight loss program, 25.00 for kids college plan, and 60 for life insurance. Is all this ok?

Sorry for so many questions,
thanks