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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am considering filing for Chapter 7 bankruptcy in Washington

Resolved Question:

I am considering filing for Chapter 7 bankruptcy in Washington State. My monthly income is below the state median income, but I own a rental property. When I fill out the B-22 means test form I know I must declare the gross amount I collect monthly from my tenant on Part 2, Line 5A.

I’ve read about a 9th Circuit BAP decision, Wiegand, 386 B.R. 238, that appears to say that I cannot declare the mortgage, taxes and insurance costs as “ordinary and necessary operating expenses” on Part 2, Line 5B. This issue will probably decide whether or not I fail the means test and will be forced to file under Chapter 13. Can I declare the amount of the mortgage, taxes, and insurance on the rental property on Part 2, Line 5B?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

The case you cited applies specifically to a Chapter 13 filing only.

For a Chapter 7 Bankruptcy filing, the debtor is supposed to enter all "Ordinary and necessary operating expenses" - including mortgage, tax, and insurance payments - on line 5c of Part II, and that amount is supposed to be deducted from the "Gross receipts" entered on line 5a, and the result entered on line 5c.


I think this is what you wanted to know. If not, please let me know.
Thank you!


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