How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Elizabeth Prentice Your Own Question

Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 170
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
70685486
Type Your Bankruptcy Law Question Here...
Elizabeth Prentice is online now
A new question is answered every 9 seconds

From Jan 2013 to july 4th week ending of 2013 I was making

Customer Question

From Jan 2013 to july 4th week ending of 2013 I was making $1730 net pay a month but a few months in that time frame i was making $1980 net pay but the last two paychecks were average $1730 net pay month (or 400 net pay a week) on july 31st i filed chapter 7 BK with a budget on $1715 on the scedules and did not put anything down on anticipated income section on scedules because i did not know what my new job salary would be until now.My question is all the job offers I am getting right now are approx $2400 net pay a month which is far above my $1715 budget on the BK scedules which yields disposable income which can covert my case to the chapter 13, if i make more than $150 disposable income i can pay my unsecured in the next 5 years or 25% of unsecured which i dont want to happen when will it be safe to take a job right after the 341 meeting or should i wait maybe a month after the 341 meeting so the trustee doesnt see this. and do you think the trustee will also look at my $1980 net pay a month above too which is in danger of disposable income as well, i did received my 341 meeting notice it doesnt say presumption of abuse DOES NOT arise but may not matter. i know the law of BK but in reality BK should be a fresh start. please could you show the BK codes with your answer you provide to me.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Elizabeth Prentice replied 1 year ago.
I am a bankruptcy attorney and I would be happy to assist you. When filing for Chapter 7 bankruptcy relief in Michigan, a single filer must make under $45,029.00 per year (GROSS), if filing after May 1, 2013. This is set by the US Department of Justice. The bankruptcy court determines this amount and whether you qualify by examining Form 22A. Form 22A is called the "Means Test." The government has set allowances for the Means Test. To determine your income the Court reviews the look back period of six months. The trustee is required to review your paystubs from the last paystub you received before filing to six months backwards.

So, in your case you would take the last pay stub you received in July and look at the ytd gross amount. Then take the last paystub you received in January and look at the gross amount. For example) if you received year to date $20,000 gross on the last paystub in July. And your last paystub in January said gross ytd earnings of $2,500.00. Then your gross income for the 6 month look back period would be 20,000 - 2,500 = $17,500, divide that by 6 and you have $2,916.66, now multiply that by 12 and you get = $34,999.99. This would qualify you for bankruptcy since this annual amount is under the $45,029 limit!!!

Ok, now to answer the rest of your question. Schedule I should state your income minus all the deductions for the month in which you file (July)...so just input the cumulative amounts from all your paystubs in July. Schedule J is your typical monthly budget. Schedule J should account for almost every dollar you get on Schedule J. You want to make your budget meet your income. If you have money (for ex-$100.00) disposable income left over on schedule J, there is no need to worry!!! Your case can only be converted based on you failing the means test (form 22A). If you have $1,000 a month left over on schedule J as disposable income, then you probably haven't inputted your budget right. Think about every dollar you spend and make sure it is listed.

Lastly, congratulations on receiving job offers!!! If you receive a new job after filing bankruptcy, you are free to accept it. The trustee can not convert your case if you start to make more money after filing bankruptcy. In fact, if you won the lottery today you would still be just fine in your bankruptcy! What matters is the six months before the day you file, not a day after. This is because you had no idea that you were going to get a new job after filing bankruptcy.

You can find the 6 month look back law here at Section 10(a):
http://www.law.cornell.edu/uscode/text/11/101

You can find the majority of bankruptcy laws in Title 11 of the Bankruptcy Code.

I hope my answer has assisted you and that you will provide me a positive rating!
Customer: replied 1 year ago.

hey elizabeth - i have read the BK laws briefly and I feel based on what i read the means test is nothing more than a trick the govt puts there to make you feel ok because in 11 USC 707b presumption of abuse its states if you can pay 25% of unsecured then conversion to a 13 would happen your example of 34,999 is approx $2100 net pay a month my budget is $1750 the disposable would be $350 enough to pay 25% of unsecured. so the trustee would not issue a presumption of abuse exception? What i really meant on my question is does the trustee after the 341 meeting do a periodic audit on me to see if im working or not do they have extensive databases available to them to see how much im making without paystubs I saw this database years ago when i was at the unemployment office all she did was is input my social and got all my job pay info in the last 5 years.

Customer: replied 1 year ago.

based on what ive read I dont understand why in the BK code they have the median income and they also have presumption of abuse in 11 USC 707b which has greater power on the BK decision on chapter 7 because in there if you can pay 25% of unsecured creditors in 5 years then conversion to chapter 13 will happen. you stated $34,999 year but that is approx $2150 net pay month my budget is $1750 on scedules that is $400 disposable income ($400 * 12 * 5 = $24000 --- 50% of my unsecured)

Expert:  Elizabeth Prentice replied 1 year ago.

First, you are NOT in a Chapter 13. So STOP reading the Chapter 13 rules. I realize you are worried about your bankruptcy, and are trying to understand a large text of rules and procedures which are incredibly difficult to understand. They have to be read in conjunction with other rules and then do not forget to read them with ALL of the case law that interprets them in the circuit which you are in. This is why most people in America hire an attorney to file their bankruptcy. It is why people like me go to law school, take bankruptcy classes for 4 months at a time 9 hours a week, take and pass bar exams and practice a career in the field. Bankruptcy attorneys are not just for show. ;)

 

Next, I can guarantee you with 100% assurance that the 341 Meeting of Creditors is NOT an audit. It has never been an audit, NOR is its purpose to try and convert you to Chapter 13. You have been clearly mislead or misinformed. EVERY debtor in America is required to attend the 341. The trustee will interview you under oath to determine if you have properly a) filled out your bankruptcy schedules, b) providing him/her all your required paperwork(6 months paystubs, 2-4 years tax returns, 6 months bank statements, etc), c) see if you have been truthful. Unless you are hiding bags of money and jewels somewhere, have an airplane you haven't listed, or have lied grossly on your petition, you should not be worrying. The trustee has NO desire to convert you to a Chapter 13, since it would be against his interest. He gets paid to administer your estate in bankruptcy. Additionally, there is NO magic audit website he is looking at. He does; however, look at your tax returns, which can clearly show a picture of someone's income. Even if you were making millions years ago, it will not be cause for a conversion to a Chapter 13.

 

Good luck at your 341 and stop worrying!

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.