Means-test calculation

[GWBcasualty]

Three questions.
On line 42 "The Average Monthly Payment is the total of all
amounts scheduled as contractually due to each Secured Creditor in the 60 months following the filing of the bankruptcy case, divided by 60."

Q: My second is an interest only mortgage that is at it's lowest possible payment. Furthermore in 47 months principal payments will begin. I am allowed to average this payment by estimating an increase of 1% over the next 60 months and by entering the principal payments?

Still on line 42 it asks if the payment includes Property Taxes and Insurance.

Q: Since I pay those items separately can I include them on this amount or should I create a separate entry? (I didn't find a line for those items...)

On Line 23 and 24 Cost of Ownership.

Q: Do you still enter the Federal Standard even if your vehicles are paid off (makes sense... I own two cars with more than 100k miles on them... I expect to be obligated to replace them in the next 60 months...). I found a link that seems to validate my thinking... does anyone have direct experience??

/2009/06/15/means-test-vehicle-ownership-expense-another-appeals-court-says-yes-even-when-theres-no-car-payment/

the link wouldn't work because the forum settings don't seem to allow the site where I found it...

Thanks!

[justbroke]

Q: My second is an interest only mortgage that is at it's lowest possible payment. Furthermore in 47 months principal payments will begin. I am allowed to average this payment by estimating an increase of 1% over the next 60 months and by entering the principal payments?

No. You must list the current payment amount.

Still on line 42 it asks if the payment includes Property Taxes and Insurance.

Q: Since I pay those items separately can I include them on this amount or should I create a separate entry? (I didn't find a line for those items...)

Most attorneys will just add the taxes and insurance to the mortgage payment amount and check the box. This is the easiest way to account for this since the forms really aren't that easy to deal with.

Q: Do you still enter the Federal Standard even if your vehicles are paid off (makes sense... I own two cars with more than 100k miles on them... I expect to be obligated to replace them in the next 60 months...). I found a link that seems to validate my thinking... does anyone have direct experience??

Not necessarily. You need to check what your local rules and precedence are on this. Some Districts allow the entire ownership allowance. However, some will only allow $200 for the allowance if the vehicle is over 6 years old or has at least 75,000 odometer miles.

[GWBcasualty]

Not necessarily. You need to check what your local rules and precedence are on this. Some Districts allow the entire ownership allowance. However, some will only allow $200 for the allowance if the vehicle is over 6 years old or has at least 75,000 odometer miles.

OK. I have been researching for a few days on the matter. So in the 9th Circuit the latest ruling is to NOT allow the "Vehicle Ownership Allowance" if you don't owe on the vehicle.
It looks like the $200 x vehicle is a go, but I am not clear on where to enter it... I believe the correct way is to enter a higher number on Line 22 and still zero on line 23/24.

That would be enough to put us under the median as we would show $7400 of income and $7600 of expenses and we didn't enter anything extravagant.

However, looking at our 2 cars with 150K miles on them I looked into buying a newer used car... I keep reading that is a good idea to get reliable transportation before filing. (Not sure why I would get a Cap 1 blank check now with better terms than later, but.... this seems the consensus).... Now if you use the legalconsumer means test and enter a car payment of $300 on line 42, the software will automatically enter on line 23/24 $196 (the difference between $300 and the unused portion of the $496 deduction).... How does that make sense???
My guess is that the 9th circuit shouldn't allow those $196 either, right??

[justbroke]

Now if you use the legalconsumer means test and enter a car payment of $300 on line 42, the software will automatically enter on line 23/24 $196 (the difference between $300 and the unused portion of the $496 deduction).... How does that make sense???
My guess is that the 9th circuit shouldn't allow those $196 either, right??

You misunderstand how the Means test works. You get a $489 vehicle allowance. You subtract your current payment from the $489 to come up with your actual allowance. Then, later on the Means Test, you get to claim the entire payment. In the end, it works out to $489, so don't worry.

[GWBcasualty]

You misunderstand how the Means test works. You get a $489 vehicle allowance. You subtract your current payment from the $489 to come up with your actual allowance. Then, later on the Means Test, you get to claim the entire payment. In the end, it works out to $489, so don't worry.

Justbroke,
Sorry if I didn't explain myself well.

I totally understand how it works.
What doesn't make sense is that if I have a payment of $300 on a vehicle I get to deduct the $300 + the unused portion of the vehicle allowance. But if I own a car free and clear I will not be able to deduct anything (well it appears $200 will be allowed if the car is old... but you get my point).

I think the law was designed to give that allowance to all car owners regardless up to that amount and that's what more than half of the courts rule that way.

[HHM]

Let me just throw this out there, if you have to go past Line 15 of the means test, you should not be going pro se.

[justbroke]

I think the law was designed to give that allowance to all car owners regardless up to that amount and that's what more than half of the courts rule that way.

Not even half. It's the minority that allows the "ownership allowance" even though the car is unencumbered. The key to that allowance was to pay for the loan on the car. The $200 allowance for cars more than 6 years old or over 75,000 miles was a consideration for the additional maintenance required on an older vehicle. (It comes from the IRM/IRS)

You have to remember, the credit industry helped (or wrote) most of the new laws that were enacted in 2005 (BAPCPA). They did it to their benefit in all cases.

[GWBcasualty]

Let me just throw this out there, if you have to go past Line 15 of the means test, you should not be going pro se.

Even if I have nothing to hide and all that is reflected in the schedules matches my bank statements?

I go past line 15 by a few hundred bucks and show a negative DMI just by using the $200 deduction for old cars.

I really like to save the attorney money and quite frankly I think I hav the forms figured out, between the great help on this Forum, case research, study on PACER and the software... most of my questions are to "cover all bases" and make sure I choose the best approach.

Many are saying that pro-se filers get more sympathy from the trustees and some lawyers seem pretty unprepared/non-professional at the 341... not sure where the truth is, but I saved some petitions prepared by lawyers from PACER on my hard disk that have some gross mistakes and red flags. Not going into details but one had a double entry on the mean test that kept the petitioner out of a Ch 13.... nobody caught that apparently.

Maybe if you use a lawyer it's a wink-wink, nod-nod scenario??

[justbroke]

A Chapter 13, pro se, will be difficult to get to and through confirmation. Less than 40% of all Chapter 13 cases are confirmed -- and that includes the overwhelming majority that are done by attorneys.

If you have a negative DMI, you may run into trouble getting a plan confirmed.

[HHM]

That is the wrong reason to go pro se (save money). You go pro se because you really have no other choice or your case is, in reality, very simple. Otherwise, the mindset of going pro se is simply repeating the same mistakes that got you to BK in the first place. The people who have trouble with pro se are the stubborn ones who believe they can do it themselves and are too stupid to ask, and pay, for help. Sorry to be blunt, but trustees are NOT sympathetic to pro se filers, if any thing, the opposite is true. Trustee look at pro se filers as easy targets and also don't like pro se filers in general because it usually makes the work of the trustee harder (not worth the $60 per case they get paid).

A good criteria for simplicity is the means test. If you have to go past line 15 your should not go pro se and it also means you CAN actually afford an attorney, but you are being too stubborn to actually get one. Also, have you really factored in the TIME you are spending on this relative to the cost of an attorney? Aside from expertise, the main reason you hire an attorney is to save YOU TIME to focus on other things.

[GWBcasualty]

A Chapter 13, pro se, will be difficult to get to and through confirmation. Less than 40% of all Chapter 13 cases are confirmed -- and that includes the overwhelming majority that are done by attorneys.

If you have a negative DMI, you may run into trouble getting a plan confirmed.

I will file for Ch. 7

[GWBcasualty]

The people who have trouble with pro se are the stubborn ones who believe they can do it themselves and are too stupid to ask, and pay, for help.

You bring up good points.

I have ben preparing for about 12 months, so I am nothing but humble and ask questions twice rather than just assume.

[justbroke]

I will file for Ch. 7

Oh, okay, I didn't see that, only a reference to Chapter 13 above (and I looked). A "no asset" chapter 7... with actually no assets (no home) and no stocks, bonds, broker accounts and other "property", can be done. As HHM points out, some Trustees will abuse pro se filers, while others don't even like them. It is usually that most pro se filers are not good with the paperwork and cause more work on the Trustee (who gets $60 a case in a Chapter 7).

If you are well prepared and have a simple case, then a pro se Chapter 7 can work. However, I would say that the District matters too. There are pro se filers in the Southern District of Florida, for example, that find out all too late that their exemptions are wrong and that the measly $1K in exemptions for all personal property (other than cars) is insufficient. (The car exemption is $1K as well and usually insufficient.) Then they are faced with property appraisers that are sent to their home.

Having wrote all that... yes, there are pro se Chapter 7 filers everyday. If I had to do it all over again, I would have initially filed with an attorney. I had an emergency filing and no attorney could file it in the time period required. By the time I realized what Bankruptcy could/would do, I was just a few days from a (trustee) sale of my investment property. I have spent way too many hours on my case, although it's winding down now.

[GWBcasualty]

Lawyers...

If you are well prepared and have a simple case, then a pro se Chapter 7 can work.

There a few defensible issues, but nothing that cannot be exempted and all the money coming in is spent on everyday necessities. Mortgage being a big chunk of it.

Looking at lawyers website I found this gem... I am sure you will appreciate it.

<<We also provide a pre-bankruptcy service which costs are put towards your bankruptcy case should you decide to file. This helps to reduce potential bankruptcy problems and to lower the risk of having your case discharged.>>

That doesn't really inspire trust uh?

[tigergem]

I think as a pro se filer, I think (maybe, maybe not) I did get a very tiny bit of latitude from the bankruptcy clerk, (depending entirely upon which clerk it was I spoke to). My case manager for sure, was very very helpful. I had one BK clerk tell me, "we DO have successful pro se filers", and then come to find out that I was the first Chapter 13 pro se filer since BAPCA to get confirmed in my district. My trustee was also somewhat helpful, but I fully recognize that he is also "not my friend".

The cost of filing pro se is not "cheap". There is certified mail. Overnight filings. Postage, postage, postage. Lots of printer paper, ink, and stress. There are the "unwritten local rules of procedure" - - subtle nuances unique to the judge and trustee that they probably won't share with you. You gain some insight into this only by observation in the court room. You won't find it on PACER. Did I mention stress? And then there is the second guessing yourself factor.

I was told more than once throughout my case, by the BK clerk and the trustee's assistant, that I had done a very nice job with my paperwork and they really appreciated it. I think (maybe) that made a big difference in how I was treated.

I have almost no doubt that the "nit picking" of my schedules on the part of the Trustee's office was a test to see if I would cave. I definitely did feel "picked upon" for a stretch there. Because even when I was forced to amend my schedules, there was no material amendment to the Plan. I darn sure had my t's crossed and my i's dotted.

Filing pro se is no minor undertaking. You can't take any aspect of it lightly. Having said that, I am not sorry I did mine pro se. (Not like I really had any choice! I absolutely did not have the money on hand to retain an attorney.) After having read some of the horror stories about trying to deal with an attorney's office, I am not sure how much I would have paid in medical bills to cope with the stress of dealing with an attorney. At least if you are pro se, and if you have the correct knowledge, skills and abilities, and a really smart bunch of friends, when something shows up in your case that needs attention, you are not hog tied to being unable to take action to deal with it, even if it is on a weekend or in the middle of the night.

Nonetheless, you will not find me encouraging people to file pro se willy nilly. I didn't personally find it to be all that terribly complicated of a process. But I did not have a terribly complicated case. I did qualify for Chapter 7 easily, but Chapter 13 suited my needs, so that is the course I went. I could very well have complicated it myself at a couple of turns there. However, I am told, by people who have been around the block a few times, that it IS very complicated and difficult and full of pitfalls. I guess I just handily and possibly even simply luckily stepped around those pitfalls.