Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.
The court really focuses on 2 things with your budget.
First: Monthly income minus normal monthly expenses should be close to zero
Second, the court looks to the Means Test. This is an analysis of the 6 months GROSS income before the case.
They match that up to the median income level for the household size
What state do you live in and how many people are in your household?
I know that I meet the means testing. What I am wondering about is if there is a certain amount above which my chapter 7 would go to a 13. In other words, if I have $150 net, should I be concerned?
Well, that depends on the amount of debt you have, and what percentage of the debt could be paid back with your disposable monthly income.
Is there like a test for that?
There is no set amount that would draw objection,
but the rule of thumb is if there is enough to pay back 10% of the debt over 5 years, then you should be in a ch13
Be sure to list all expenses that don't always occur each month too, pro -rate them
like car insurance, school expenses for kids, car maintnenace, home repairs etc.
Don't go crazy with these, but the court allows some since they are necessary
the closer to zero the better
be sure to include expenses for items you may reaffirm - furniture, jewelry, electronics etc. for your secured debts
also student loan payments too can be listed
There is no 'test' but I like to get my clients under $25 left at the end of the month to be safe
$150 x60 would pay back $9k of debt in a ch13, so, that could be too much disposable.
Of course, it's a case by case basis/totality of the circumstances.
Do you have any other questions?
Feel free to request me if you do! thanks and good luck to you
please click accept so Just answer can close the question and I get credit for answering. thanks!Terry
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).