How is dmi calulated with expenses?

[lvmcse]

A little confused about this one. Did my research. I can't find a answer.

Basically you have your living expenses, food, transportaion, and for me a car loan. That's a obvious. Of course they need to be within the means. My question how do credit cards payments factor into this. Currently with the min payments, i'm short $950.00.

Could someone please explain.

[ValleYum]

To figure out your DMI, you use the Means Test.

Your credit card payments DO NOT count when you are trying to compute your DMI. Why? Because you won't be paying them anymore once you have filed bankruptcy.

There are Means Test calculators on the internet which also give you your DMI.

The best one I found was here: http://www.legalconsumer.com/bankruptcy/means-test/ Type in your zip code and it will automatically load and prompt you for the $ amounts it needs for each question. Read each question carefully and you will get your DMI amount and the answer to whether you are eligible to file for Chapter 7 bankruptcy all in one test!

Good luck!

[ValleYum]

This may help you too:

Deductions under Standards of the IRS

• A marital adjustment for any amount of income from a non-filing spouse that is included in CMI but not used for the contribution to the debtor or their dependents
• The IRS National Standard for food, clothing, and other items
• The IRS local standard for housing and utilities not including mortgage expenses
• National standard for health care
• The IRS local standard for mortgage and rent expense, reduced by the amount of the 60 month average actual mortgage expense (recaptured later in the formula), if any
• IRS Transportation Standards for vehicle operation and public transportation
• IRS Transportation Standards for ownership and lease expenses reduced by the amount of the 60 month average actual secured vehicle payment (recaptured later in the formula), if any
• Average monthly federal, state, and local income, self employment, social security, and Medicare taxes
• Mandatory payroll deductions such as mandatory retirement contributions, union dues, and uniform costs
• Average monthly term life insurance expenses for the debtor only
• Maintenance (alimony) child support, or other court ordered payments
• Education expenses that are a condition of employment or required for a physically or mentally challenged dependent child
• Child care expenses
• Health care expenses in excess of the IRS national standard allowance, not covered by health insurance or paid by a health savings account.
• Telecommunications expense other than basic phone and cell phone service, such as pagers, call waiting, caller id, long distance, internet service, etc. to the extent necessary for the health and welfare of the debtor and their dependents

Additional allowed expense deductions

• Health insurance, disability insurance, health savings account contributions
• Costs to necessary to support an elderly, chronically ill, or disabled member of the debtor’s household or immediate family
• Expenses actually incurred to maintain the safety of family under the Family Violence Prevention and Services Act
• Documented home energy costs that exceed the IRS guidelines above
• Reasonable and necessary documented children’s education expenses (limited)
• Additional food and clothing expenses, documented and strictly limited
• Charitable contributions (limited to 15% of gross monthly income)

Debt Payment Deductions

• The 60 month average of the total amount due in the next 60 months to any secured creditor such as a mortgage (including taxes and insurance), car payment, or other secured creditor (recaptured from previous deduction)
• The 60 month average of any amount of default on any secured property necessary to avoid foreclosure or repossession
• The 60 month average of any tax, child support, spousal support, or other priority claims
• Estimated administrative expenses that would apply in a Chapter 13 (if eligible)

The current monthly income, reduced by the above deductions equals the debtor’s Disposable Monthly Income, or DMI.

http://www.mwortmanlaw.com/chapter7-means-test.htm#b

Also See: www.usdoj.gov/ust

[ValleYum]

What I neglected to say above was you use the Means Test to determine eligibility to file Chapter 7. Schedules I & J compute the actual DMI. Sorry for any confusion.

[SMinGA2]

Think of what your actual bills/expenses would be after filing. Credit cards would not continue to be paid - so those do not factor into DMI. Examples:

Mortgage/rent
Property Taxes, Insurance (or rental insurance if you do not own)
Home maintenance
Life insurance
Health insurance
Medical OOP, copays, over the counter, etc.
Utilities, Phone, Cable
Car payment
Car insurance
Car gas
Car maintenance (even a newish car needs oil changes, occasional brake work, tires)
Car ad valorem, registration expense
Groceries
Household items (Cleaning supplies, paper products, etc.), personal care items
Clothing, laundry, dry cleaning expenses
Educational expenses
Bank fees, postage
Entertainment (a small amount is reasonable - how much will depend on your family size & district)

Try to think of it in as much detail as possible for now. Ultimately your attorney would help with how to group things for the bankruptcy schedules.