Expenses vs. Income

[looncid]

Hi.
I am well under the median income in my state, but have been advised that this is no guarantee to qualify for Chapter 7. This conflicts with what I've read. I'm told my income still must be below my expenses in order to be considered for Chapter 7. This is a problem as my summer income is much higher than fall, and right now it appears I have a large amount of disposable income in the till... My question, and any sort of input would be very helpful, is if I'm under the state's median income, do I have to worry about a Chapter 7 not going through because of the appearance of much disposable income?

[AngelinaCat]

You may need to wait until the summer income drops off and you are back to whatever your normal income is. The look-back period is usually six months--it can be longer depending on other factors--but is usually six months.

DH and I get a yearly stipend from in trust in January of each year, so when we were planning, we had to wait at least until July 1 before we could file.

One thing you will have to do before filing in any case is to take an approved by the BK court, pre-filing consumer credit counseling. Ours lasted about 30-40 minutes with a counselor in our town, and cost $70.00 for us as a couple. We had been trying for a Ch13, but when the counselor looked at our paystubs, bank statements, and our list of utilities and expenses, she told us that we were more suited to a Ch7. That was before I lost my FT job.

You will get a certificate of completion which must be turned in to the court with your petition, either by you if you do it yourself, or use an attorney.

Good luck to you and welcome to the forum.

[looncid]

Thanks, but I guess to sum it up - if you are below the median income, how important is your disposable income -how important is the expenses vs. income section??? If I'm not showing a deficiency every month, is this going to be a problem? That's what I've been told. I've filled out the forms and am 95 percent done with the prefiling process.

[justbroke]

Thanks, but I guess to sum it up - if you are below the median income, how important is your disposable income -how important is the expenses vs. income section??? If I'm not showing a deficiency every month, is this going to be a problem? That's what I've been told. I've filled out the forms and am 95 percent done with the prefiling process.

Disposable income is always important in the calculation. Your disposable income has to be less than $108, or, if you have special circumstances, less than about $182 per month. This is regardless of whether you are over or under the median.

[looncid]

Thanks!!! Tis what I suspected. Very helpful.