means test question

[facinglife]

I'm planning on filing chapter 7 soon but not sure when to do it. I am a teacher and do not get any pay checks in July and I just get one the last day in August (normally I would not get paid in August but August is a 3 pay check month and I end up getting paid the last day of August). According to my attorney if I file in August I pass the means test (by my calculations it's close but we do pass) but I was wondering if there's any benefit to waiting until September or October to file so I can easily pass, won't even be close. The problem with September is that the six month lookback includes two months where both my husband and I earned three paychecks. So now I'm thinking October so March can drop off and I can still use my two months of no paychecks in the means test. I know this is long but if anyone has an opinion I'd appreciate it. Thanks!

[Pandora]

welcome to the forum

Means test is only part of the issue - DMI is the other part. You can be over median and still able to file Ch. 7, or you can be under median and end up in a Ch. 13....thats where DMI comes into play. It all comes down to your monthly bills / allowances.

Search through the forum and you will find alot of info regarding how best to proceed along with many others that have had the same issue you're facing

[facinglife]

Thank you Pandora. Believe me I constantly search these forums for information but have yet to find something that meets my exact situation. But, I'll keep checking!

[SMinGA2]

As Pandora mentioned, Means Test is not the final answer.

Have you assessed your monthly net income, less monthly bills/expenses? You would not count anything that would be discharged in the bankruptcy. So ignore credit card payments. You would want to consider reasonable expenses though for your family size - not living on ramen noodles while struggling to pay on credit cards.

[justbroke]

Like I always say... the Means Test is but a bright-line test that only indicates whether you may be eligible to receive a discharge in a Chapter 7. There are other "tests" including your disposable monthly income (DMI) test based on Schedule I and Schedule J, as well as a totality of circumstances and/or abuse test.

I have found -- from examining many cases -- that the Office of the United States Trustee (OUST) seems to not bother many under-the-median income folk and don't become "interested" in their cases. However, some real discrepancy in income between the Means Test and Schedules I/J could have them more "interested" and wondering.

Specifically, I don't think anyone should play the "6-month" lookback "game". Of course, it works in many cases, but there are cases where the 6-month game does not work.

I always say... you are either eligible for a Chapter 7 discharge or you are not. Most people who wait, are just waiting for income to fall off because they were recently laid off or otherwise lost their job. They are not trying to take advantage of a recurring break in service.

I like your attorney because s/he is right. Just file if you're close. By the time of the 341 meeting -- 30 days later -- and the UST is there and starts saying you're "close", you can say... "not now!" (By close I mean that you qualify and are below the amount that would put you in a Chapter 13. However, those numbers should be defensible and not heavily "padded" so as to invite scrutiny.)

[Tater]

My husband and I were above the median income in our state and we still qualified for a Chapter 7 filing. Once the expenses and deductions came into play, that is when we actually qualified. We were coming up in the hole about $400 every month.