cancel
Showing results for 
Search instead for 
Did you mean: 

How often is bankruptcy denied?

tag
Rlandon87
Regular Contributor

How often is bankruptcy denied?

My lawyer has me scared... I just filed for Ch7 due to a loss of a job over a year ago. It has had me in the red in my bank account every since and I am not even able to afford daily expenses much less the amount of debt I have.

Back story- I used to earn 95-100k a year. I had about 50k in cc limits. I utilized many of these cards after losing my job to pay bills, maintain daily expenses, and to aid in job searching in other areas. .

Long story short - over a year later I have many charge offs, a pending law suit, and many missed payments. I have about 10 collectors breathing down my neck. I decided it was time to file.

I submitted pay stubs for my wife and I - and in my area a family of 4 is allowed to make $60549 annually to avoid the means test and to file for chapter 7 based on income guidelines.
My wife and I earn around $74000 combined.
After completing the means test my available cash monthly is $-23. So based on that number I should be able to file due to not accumulating more than $7700 in 60 months of available cash.

I think the $74000 figure may increase - but very slightly, not enough to make much of a difference, maybe 130-180 a month increase.

Her $-23 figure does not account for my wife's $497 a month car note. Shouldn't this be included also? I'm filing alone but if my wife's income is being utilized shouldn't her secured debts be figured in as well? After all her money is being used to pay bills, not just extra money we have to go play with.


Hit a brick wall today.... Stressed out and sick to my stomach. My attorney says that the trustee will likely challenge my petition and possibly deny it due to me being over the federal allotted annual income limits. How can that matter if I passed the means test?

Has anyone ever been denied even if they pass the means test? And what is the likelihood of it happening to me?
 photo ficos3.jpg
Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: How often is bankruptcy denied?

just for clarification Are you filing indivicually or joint? Sounds like youre filling individually.  do you have joint bank accounts and joint assets that need protection? own a home together? Consult another attorney if you don't feel what your current attorney is saying is helping. Your attorney should be on your side, and be your advocate to helping you in this trying time. 

 

 

Her debts would be included if you file jointly, and would include her car payment, even if youre filing seperately her income counts as household income but her debts would not be included.

Message 2 of 5
Rlandon87
Regular Contributor

Re: How often is bankruptcy denied?

So based on what youre saying... When i file individually I must include her nearly 3,000 a month income but do not include her 500 a month secured car payment?

That doesnt make sense. Under that scenario it appears that her full 3000 is able to be utilized by me to pay billsp- when in fact it is not and is promised to a secured debt.

 

Im mainly wondering how often Ch7 are denied even when the means test is passed.

 photo ficos3.jpg
Message 3 of 5
Anonymous
Not applicable

Re: How often is bankruptcy denied?

If your numbers are legitimate and can be proven, you should be fine.  

 

I'm guessing you used the legalconsumer  means test calculator? https://www.legalconsumer.com/bankruptcy/means-test/

 

You can also read more here: https://www.nolo.com/legal-encyclopedia/marital-adjustment-deduction-bankruptcy-means-test.html

 

Pay close attention to this section:  How the Marital Adjustment Deduction Works

 

......from that section on that website: 

 

However, in Part 1 of the means test, you can deduct any amounts that your non-filing spouse uses to pay for personal expenses that are separate from household expenses. These expenses are called marital deduction expenses.

 

Examples of Expenses that Might Qualify for the Marital Adjustment Deduction

 

  • car payments, insurance, and car expenses for your non-filing spouse’s car

 

 

The real question is you lawyer seeing something that is sticking out?  How many BK does he do a year? Is it his main or a big part of his practice? 

 

and as suggested you can always get a second opinion. 

 

 

Message 4 of 5
Rlandon87
Regular Contributor

Re: How often is bankruptcy denied?

He completed the means test for me, I also used legal consumer website and it was close to what he provided.
All he does is BK, and apparently stays busy.

I may get a second opinion. I can definitely prove all my income / bills
 photo ficos3.jpg
Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.