Live with parents, question about mean test

[chastal]

Hi everyone, this is my first post here but I have been a frequent visitor, reading several topics and want to say a quick thanks for each and everyone that contributes. It has been tremendously helpful.

I have decided to file chapter 7 pro se in my state of virginia because I'm a no asset case, have a good grasp on the process (thanks to many of you) and do not wish to pay $1300+ to hire an attorney. I'm feeling fairly confident I can do this on my own. But I certainly don't have all the answers.

Here's just a quick introduction to myself and my situation. I am a single 26 year old, living with parents rent free my entire life, made $70k last year (2008) at my old job, yet squandered all of my money away. I have roughly $29,000 in total debt from various sources -unsecured credit cards, a debt consolidation loan, car repossession, store credit cards, and a $1000 in student loans that are non-dischargeable. I quit my job in January and remained unemployed until July 1st when I landed a part time retail manager position paying me $11 an hour/25 hours a week.

My question is how does my parent's income effect me on the means test?
I live in a 5 person household and my dad and stepmom make $99,700 combined. I make $1200 a month = $14,400. Those numbers combined puts my household around $114,000 a year, well over the state's median income requirements. Proceeding to the next parts of the test...

Part 1: Military and Non-Cumsumer - does NOT apply to me, I left the values at zero.

Part 2: This is the tricky part for me. Do i just add MY monthly income + what my parents pay for me to live in their house (i.e. 1/5th of his mortgage, utilities, food, etc.?) or do I put just MY income, or put everyone's income into play?

Thanks in advance for your response and help!

[jribe]

you need to include all of the household's income. Good things is that then you can claim your household as "5" or whatever it may be as far as allowed income.

As far as your expenses; you can only put what you actually have as an expense. You stated that you've lived rent free; you'll need to change that arrangement or you will not be allowed the expense. You can't just claim "1/5th" of household expenses. You need to use ACTUAL (ie documented) expenses incurred by you.

There are state allowences that can be put in; however if you get audited and those weren't your numbers you could be in trouble.

Now i am just curious- why quit a job that was paying 70k a year to take an $11 an hour job 7 months later? Are we missing something?

Hi everyone, this is my first post here but I have been a frequent visitor, reading several topics and want to say a quick thanks for each and everyone that contributes. It has been tremendously helpful.

I have decided to file chapter 7 pro se in my state of virginia because I'm a no asset case, have a good grasp on the process (thanks to many of you) and do not wish to pay $1300+ to hire an attorney. I'm feeling fairly confident I can do this on my own. But I certainly don't have all the answers.

Here's just a quick introduction to myself and my situation. I am a single 26 year old, living with parents rent free my entire life, made $70k last year (2008) at my old job, yet squandered all of my money away. I have roughly $29,000 in total debt from various sources -unsecured credit cards, a debt consolidation loan, car repossession, store credit cards, and a $1000 in student loans that are non-dischargeable. I quit my job in January and remained unemployed until July 1st when I landed a part time retail manager position paying me $11 an hour/25 hours a week.

My question is how does my parent's income effect me on the means test?
I live in a 5 person household and my dad and stepmom make $99,700 combined. I make $1200 a month = $14,400. Those numbers combined puts my household around $114,000 a year, well over the state's median income requirements. Proceeding to the next parts of the test...

Part 1: Military and Non-Cumsumer - does NOT apply to me, I left the values at zero.

Part 2: This is the tricky part for me. Do i just add MY monthly income + what my parents pay for me to live in their house (i.e. 1/5th of his mortgage, utilities, food, etc.?) or do I put just MY income, or put everyone's income into play?

Thanks in advance for your response and help!

[chastal]

Well I was working as the Fitness Director for a new health club in my area for about 2 years but I started allowing the pressures of the position (or creating them within myself) to get to me along with feeling very depressed outside of work. Failed dating relationships, lack of closeness with my family, and a feeling I grew up too fast and bit off more than I could chew. At the end of my time there I felt like a failure personally and didn't feel worthy to hold the job anymore. I have no college degree or relevant certifications to hold such a position. My job was never in jeopardy, I just didn't feel confident enough inside to cut it. I bought things and spent frivolously to make myself feel better.

you need to include all of the household's income. Good things is that then you can claim your household as "5" or whatever it may be as far as allowed income.

As far as your expenses; you can only put what you actually have as an expense. You stated that you've lived rent free; you'll need to change that arrangement or you will not be allowed the expense. You can't just claim "1/5th" of household expenses. You need to use ACTUAL (ie documented) expenses incurred by you.

There are state allowences that can be put in; however if you get audited and those weren't your numbers you could be in trouble.

Now i am just curious- why quit a job that was paying 70k a year to take an $11 an hour job 7 months later? Are we missing something?

[chastal]

Oh and going back to part 2 of the means test. I kind of figured it did want my parent's income but was confused because it breaks it down into two columns. Column A "Your average income per month" and in Column B "Spouse's average income per month"

Obviously I am not married, but I'm surprised they don't have a "column C" to account for other persons (such as my parents) living in the household and their income.

[chastal]

Ok, after taking a real close look at this Part 2 of the means test and its instructions, i'm pretty sure I do not have to include their income as my own in column A, rather, I need use my own personal income plus any amount that they contribute to my household expenses (i.e. the 1/5th of the mortgage, 1/5th of electric, food, etc. ---per the 2nd bullet in the instructions below)

Current Monthly Income (CMI) is the monthly average of certain income that you (and in a joint case, your spouse) received in the six calendar months before your bankruptcy filing.
CMI includes:
(1) income from all sources, whether or not taxable, and
(2) any amount paid by an entity or person other than you (or your spouse in a joint case) on a regular basis for your household expenses, your dependents, and (in a joint case) your spouse if not otherwise a dependent.

My parents no longer claim me as a dependent on their taxes, I claim myself (not sure if that has anything to do with this in this situation lol). I know my debts are mine and mine alone. I do not receive support from them other than free housing and some food. If for some reason I'm wrong, please explain to me so I can fully understand. I cannot see how a person in my situation would not qualify to file. I own nearly nothing. Just my clothes, a TV, and a couple pieces of furniture in my room. How could my parents income affect my qualifying? What if I got kicked out of the house tomorrow and was homeless

[justbroke]

Your parent's income counts only to the extent that they pay things for you, such as your housing cost. For the most part, that would be what they contribute towards keeping a roof over your head, and food that they may purchase for you.

In the end, having no expenses, could inflate your disposable income amount and put you into a Chapter 13. For example, making $1,200/month gross or $900/month after taxes, and having no living expenses (car, food, clothing, etc), would mean you have $900 monthly in disposable income. If you're using 1/5th of the household expenses as your additional income, and you're not contributing anything to the household... then you're going to end up with a lot of disposable income. You may be able to then claim the 1/5th back as an expense, but even doing so, still leaves you with a lot of disposable income. (Adding the 1/5th expense to your income, then deducting it back as actual expenses, basically means the living situation has $0 worth of affect on your disposable monthly income). I think you may still be under the median income, at least, so that would allow you to use actual expenses. Your problem is still going to be with expenses.

You don't even have a car?

What if scenarios don't count in Bankruptcy. The Court can only consider the facts as they exist today. So, bringing forth "what if" scenarios doesn't help your case.

If you're living comfortably in a nice home and you have no expenses, and have $900/month in disposable income (or more), that won't qualify you for a Chapter 7 discharge. The reason that your parent's contribution is added in... is specifically to offset what passive income you receive from living there rent-free.

Stop paying your credit cards... save some money for a few months (on not paying), and hire an attorney. Your situation is... well... unique in a way. Most debtors actually have living expenses. The Trustee is going to wonder where all your money goes.

[chastal]

Thanks JustBroke. I had my car repossessed in May. My dad has a spare vehicle, a 1997 Mercury Mountaineer, that he allows me to drive to and from work. You are right in that I bring home roughly $900 a month. I pay my dad $100/month for my cell phone, gas seems to be around $80/month, I spend about $60/month in food, and i am maintaining car insurance for a named non-owner policy. It's very cheap, about $8/month. I have no other expenses at this point. That leaves roughly $650/month as disposable income. I'm sure that's a lot to many that have gone through this process but it doesn't give me much wiggle to room to do things that i feel are necessary for me to finally grow up (moving out, paying rent somewhere, obtaining a cheap car) and getting the fresh start that I know bankruptcy can provide me.

I understand that the court does not deal with "what ifs" but I don't know what I'd do if i don't qualify. I need this badly. I will heed your advice and speak with a lawyer.

[justbroke]

I understand that the court does not deal with "what ifs" but I don't know what I'd do if i don't qualify. I need this badly. I will heed your advice and speak with a lawyer.

You parents seem affluent... perhaps they can gift you the attorney fees. You will probably need to "shop" for an attorney. I'm guessing that an attorney may be able to find enough legitimate expenses, to keep you in a Chapter 7. This may include actually moving out and getting a place or at least paying your parents a higher share of your cost. For example, paying them $500/month for rent. Your food costs seem real low. What about entertainment?

This is where a skilled attorney will help you.

[chastal]

I would say our family is middle class. My parents combined income is just shy 100k. The mortgage is $1200 and they finance 2 vehicles, an 03 sebring and and 04 Wrangler. They themselves are up there with credit debt, I believe to be at least 20k.

They are unable to help pay for an attorney for me, partly because we had to put a new engine in the Mountaineer to get it running again so I could use it for work. This will be something I have to get through on my own. And I'm ok with that. It's time for that to happen.

I did shop for a BK attorney back in April and although I didn't sit down with the least expensive guy/gal, I met with one who was established in my area and we had a nice 30-45 minute free consultation. At that time, he didn't even seemed concerned that I was living rent free with my parents but rather more concerned with my last years earnings ($70k) and how that would compute in the means test/explaining what I did with all that money. At the end of the consultation he was very reassuring that he could help me and that I would be a candidate for Chapter 7. I'd like to chat with him again, not so sure it'll be on the house next time though! lol