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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12249
Experience:  JD, MBA
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So we met with a lawyer and he said that he would get back to us regar

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So we met with a lawyer and he said that he would get back to us regarding what we could qualify for given the means tests. He called today and mind you that he want us to file for chapter 13 (since he will end up making more money). He said that he does not think we qualify for chapter 7 even though we have a huge mortgage, lots of dependents (10 of us) and lots of expenses. I asked him why his test results yielded such different results than ours and he said that he uses his own means test software program. He also said that in chapter 7, you can't deduct the payroll taxes but you can in Chapter 13. This isn't true is it?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 5 years ago.
Hello and thank you for allowing me the opportunity to assist you.

Please note that for legal reasons my answers are only intended to be general/educational information rather than specific legal advice. If you need specific legal advice, then you must consult with a local attorney in your jurisdiction.

Before addressing your specific question, I'll comment on this:

"he want us to file for chapter 13 (since he will end up making more money)"

If your lawyer is pushing for you to file a Chapter 13 bankruptcy merely because he'll be making more money, then you need to find a new lawyer. Your lawyer should advise you based on your best interests, not his.

As for deducting payroll taxes when determining whether you qualify for a Chapter 7, the answer is yes. It is mandatory and, therefore, it is deductible.

Have I satisfactorily addressed your concerns? If not, then feel free to let me know, as I will be happy to clarify my answer or help with your follow-up questions. In the meantime, please remember to click the green accept button so that I will receive credit and compensation for my time (doing so does not end our discussion). Positive feedback is always appreciated as well. Thank you and good luck!
TJ, Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.

I needed to gather more info to ask you about filing for bankruptcy chapter 7. We bought 2 properties-- one condo in Las Vegas and one in New Mexico (we live in the primary one in colorado). We received a 1099-a for las vegas property that said that we owed in box 2 162K, and fmv in box 4 is 70K; box 5 was checked yes. We have not received a 1099-c yet, so we are assuming that the bank has not discharged the debt yet. There was only one primary loan on this property. If we were to file for bankruptcy, where do we include this in the schedules?

Also, we receive 1099-a for the property in new mexico. We have a first and heloc on this property. We received a summon for the heloc a month ago. We received a 1099-a last december and in box 2 it had a balance of principal outstanding of 48K (which is what we owe on the heloc), box 4 had fmw at 140K, and yes the borrower was liable is checked. The principal balance was 99K. So our question is, where do we include this in the schedules of the bankruptcy?

We will probably need to include at least the las vegas so that the bank can't come after us in the future correct? And since we haven't received 1099-c for both properties, it's better to file before we get them??? Your help is very much appreciated and we don't mind paying more for this answer.