Disposable Income

[justagirl]

Am I correct in my assumption that disposable income is calculated by Schedule I minus Schedule J?

Thanks,

JAG

[justbroke]

It depends. Are you filing Chapter 7 or Chapter 13? Are you over or under-the-median income?

Even then, it depends on which District you're in. The majority operate this way...

If you're over the median income, your disposable (monthly) income (DMI) is based on the Means Test (Form B22A in Chapter 7, and Form B22C in Chapter 13).

If you are under-the-median income (or in one of the "special" Districts), your disposable (monthly) income (DMI) is based on Schedule I and Schedule J.

In every District, the Trustee will still look at your Schedule J as a gauge of whether you can afford to be in a Chapter 13 (if you're filing a Chapter 7), or if you're committing enough DMI to your plan if you're in a Chapter 13 (to compare it to your B22C).

[justagirl]

Thanks, Justbroke!

I appreciate your thorough, well-thought out answer - for this and for all answers you give on this forum!

I'm doing chapter 7 and am under the median income for my state (by more than $20,000). My paralegal is putting together my petitions this weekend, and I've gone into "what if..." mode. Of course, she is away on vacation and not returning until Friday and now I have all of these questions spinning in my mind! LOL

I agree with someone else on here - don't remember who - that you should write your own book on filing BK! Your posts have been an immense help to me, and I sincerely appreciate it.

JAG