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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience:  B.A.; M.B.A.; J.D.
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I am wanting to file ch 7, We hired attorney April 2010. We

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I am wanting to file ch 7, We hired attorney April 2010. We had a loss of income which made it hard to pay bills. I was told we couldn't file until our car and house payment were caught up. it took a year but we are now caught up however we made$93,000 last year $55,000 after deductions. I claim 6 people on my taxes,my husband, myself, my daughter 21 a student, son 19 student, daughter 17 student and granddaughter 2. my mother in law lives with us, she is on SSI but doesn't pay us anything. do I make to much to file ch 7? I did the means test but it seems in accurate my house punt is $1314 and the car allowance is way off as well as groceries. my attorney wont give me a straight answe.
thank you
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 3 years ago.

Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.

 

Question: I am wanting to file ch 7, We hired attorney April 2010. We had a loss of income which made it hard to pay bills. I was told we couldn't file until our car and house payment were caught up. it took a year but we are now caught up however we made$93,000 last year $55,000 after deductions. I claim 6 people on my taxes,my husband, myself, my daughter 21 a student, son 19 student, daughter 17 student and granddaughter 2. my mother in law lives with us, she is on SSI but doesn't pay us anything. do I make to much to file ch 7? I did the means test but it seems in accurate my house punt is $1314 and the car allowance is way off as well as groceries. my attorney wont give me a straight answe.
thank you

 

Response: Even if you made $93,000.00 last year, the income that would be used to determine if you qualify to file for Chapter 7 would be income that you have made this year, specifically, income you have made from January 1, 2011 to June 30, 2011 if you want to file this month. The income that is used in Means Test calculation is 6 months income before the month of the filing of the bankruptcy case. You should also count your mother-in-law. Her SSI will not be used in the Means Test Calculation. However, the fact that she is receiving SSI must be shown on the Schedule 1. Also, see Schedule J for household expenses:

 

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_1207/B_006I_1207f.pdf

 

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_1207/B_006J_1207f.pdf

 

You may be eligible to file for chapter 7 bankruptcy protection, if you meet the means test--the income test. If your income is equal to or less than the current income guidelines for your household size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal.

 

These are the current income guidelines for the State of Texas:

Household of one person $38,294.00
Household of two persons $55,178.00
Household of three persons $56,445.00
Household of four persons $65,477.00
Add $7,500.00 for additional individual

 

http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm

 

 

Means Test Form:

 

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK%20Forms%201210/B_22A_1210.pdf

 

The decision that you made to delay the filing until you are caught up with your car and house payments is the correct one. If you are filing for Chapter 7 and are behind on your car and house payments, once you file for the bankruptcy protection, your lender would immediately file a Motion for Relief from the Automatic Stay to repossess the vehicle and to foreclose on the property. Chapter 7 unlike Chapter 13 is a liquidation chapter. It is not for reorganization of your debts. So, if you file for Chapter 7 and are delinquent on your obligations, your creditors are not going to give you chance to come up with a payment plan, your creditors would immediately take action to get their property back and to recoup their investment.

 

Customer: replied 3 years ago.

Is the income table after the standard deductions are given or before? Also, is that gross or net income?

Expert:  Phillips Esq. replied 3 years ago.

Is the income table after the standard deductions are given or before? Also, is that gross or net income?

 

Response: Before the standard deductions. All incomes used are gross incomes. However, you get credit for deductions in the final calculation--in the amount that shows up in Columns A and B of the Means Test Calculation form because the software used in calculating the Means Test would ask for gross income and payroll deductions. Once the figures are put in, what shows up in Columns A and B of the Means Test is your net income. Also and as stated previously, the income used in the calculation is the income earned 6 months before the month of filing of bankruptcy.

 

Customer: replied 3 years ago.
One last question. How does one prove residence if they aren't on my taxes?
Expert:  Phillips Esq. replied 3 years ago.

 

One last question. How does one prove residence if they aren't on my taxes?

 

Response: If she is receiving SSI and living in your home, her Social Security Statement of Earnings would have your address on them. Also, if she has separate phone bill, your address will be on the bills. In addition, if she belongs to AARP and other membership organizations, your address would be on her mailings. Furthermore, if she has a car, her car insurance and registration information will have your address on them. If she has Identification Card or Driver's License, your address should be on the cards, and the list goes on. Finally, you are signing all your bankruptcy documents under penalties of perjury. So, the Court and the Bankruptcy Trustee would take your word for it if you cannot produce any evidence IF requested to show that she is a member of your household.

 

This is my final response to your original post. Your original question has been completely answered. You can Accept or not Accept one of my Answers.

 

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience: B.A.; M.B.A.; J.D.
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