New here - have questions

[Mom63]

So for Michigan 4 people, the expense limit for housing with a mortgage is $1224.00. So does that mean that if our expenses are over that, we can't deduct that from our income to lessen our disposable income? Also, are there basically only 3 charts for expenses - housing expense (my state), car expense (my state) and the Food, Clothing and Other Items expense (Federal guide)? Do the following things fit into the food, clothing and other items: school lunches, haircuts, pet costs and gifts.

Sorry for the questions but I am getting really nervous about if we will be able to file chapter 7. We are over the income guidelines by a little and I am trying to figure out this mean's test thing. I tried doing the test online but my computer is not working right with that sight.

Please help - I can't breathe.......

[LadyInTheRed]

Here's the response I posted in your thread in the inactive user's forum. As JustBroke implied, your $1224 figure doesn't seem to match up with any MI local allowance.

The housing expenses vary by county. For allowable expenses in MI, go to: http://www.justice.gov/ust/eo/bapcpa..._charts_MI.htm

On the means test, you deduct your actualy mortgage payments on one line. On another line, if your mortgage is less than your local mortgage/rent housing allowance, you also deduct the difference between the allowance and your actual payments. If your mortgage is higher than the local allowance, you get the entire mortgage deduction on the means test and the line for the allowance is zero. On Schedule J, you include only your actual expenses. So, it your Schedule J expenses are lower than your means test expenses, is possible to pass the means test but not qualify for a Chap 7 because you have enough disposible income to fund a Chap 13. Once your registration is fully activated, do a search of the term "totality of circumstances" to find threads on the topic..

ETA: I edited the above because I initially thought your actual mortgage payment was lower than the local allowance. If it is higher, then you aren't likely to have a tatality of circumstances problem because of the mortgage.

All means testing info can be found at http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

Welcome to BKforum!

[LadyInTheRed]

Do the following things fit into the food, clothing and other items: school lunches, haircuts, pet costs and gifts.

For the means test, all expenses that don't have their own line, have fit in the local or national standards somewhere. You can itemize your actual expenses on Schedule J.

Please help - I can't breathe.......

Take a deep breath and try to relax. You don't have to figure all of this stuff out yourself. Make appointments for a couple of free consultations with BK attorneys so they can advise you on all of these details.

Also, there are more than one online means test calculator. Google "means test calculator" and maybe you can find one that will work for you.

[Mom63]

What is the difference between the means test and schedule j? What one determines if you qualify for chapter 7?

[Pizza]

They both do.

The means test gets you through the presumption of abuse based on your last 6 months of income.

The schedules demonstrate your (lack of) ability to fund a Ch.13 based on future income and expenses.

[LadyInTheRed]

What is the difference between the means test and schedule j? What one determines if you qualify for chapter 7?

They both do.

The means test gets you through the presumption of abuse based on your last 6 months of income.

The schedules demonstrate your (lack of) ability to fund a Ch.13 based on future income and expenses.

If your mortgage payments are higher than local standards, Schedule J probably will not disqualify you unless you have some other expenses that are very low or if your future income will be signifincantly higher than during the 6 months before you file.

[Mom63]

If your mortgage payments are higher than local standards, Schedule J probably will not disqualify you unless you have some other expenses that are very low or if your future income will be signifincantly higher than during the 6 months before you file.

My mortgage payment is less than the allowable standard, but my utilities are higher.

[keepsmiling]

You can pretty much forget about a line for gifts. Haircuts should be ok unless they are outrageous- there's a line item there somewhere for personal care. If you are getting highlights and the owner's services at 150 a pop, that may not fly. btw around here it's not extraordinary to charge 60 bucks for a trim. It's ridiculous!

If you can prove your high utilities, you won't have a problem. Unless your tt decides too many cellphones are a luxury or some such. Hopefully you don't get Alorth's tt.
If you want to post your income and expenses, we're pretty good at tweaking.

Q for the pros--- does the mortgage payment include taxes?

[LadyInTheRed]

does the mortgage payment include taxes?

I think so. On the means test, next to where you enter your actual mortage payment, there is a box to check to indicate that it includes taxes and insurance.

[BKAttyMI]

Mom63, schedule a meeting with a local bankruptcy attorney before driving yourself crazy. I can usually tell someone on the spot whether they qualify or should consider a 13.