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Ch7 Job questions

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Valued Member

Ch7 Job questions

. I have a couple questions. we are looking to file chapter 7. according to means test calculator we are eligible for 7 as we we are/have been below the median for our area. are we still subject to test for disposable income? I recently quit a decent paying job due to untenable circumstances and am now only making 9 per hour at a seasonal job. id like to get a better paying job as our rent situation may change during this time as well. would this mess us up or is it ok to take more pay as long as you stay under median income? or would this run the risk of turning it in to a chapter 13?
Message 1 of 6
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Valued Contributor

Re: Ch7 Job questions

Median test is for abuse.  It is possible (probably not likely) to be rejected under median income.

I would file ASAP if you know you are going to file.

Every trustee is different.

 

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Message 2 of 6
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Moderator Emeritus

Re: Ch7 Job questions

For chapter 7 you will need your expenses to exceed your income. You also need to be under the median income. Essentially they are two separate tests that need to be passed (I & J and the Means Test). If you're below the median income, you've passed the means test and can file for Chapter 7 bankruptcy. It's as easy as that.

 

Schedules I & J use your actual (and forward looking) income & expenses and may show a positive disposable monthly income (DMI). If your actual net DMI is high enough, in other words, you have sufficient monies left over each month to fund a Ch13, then you could very well be ineligible for Ch7. The choices then would be to have your case dismissed or to convert to a Ch13.

 

What you do to stay under the means is generally irrelevant. But as @Shooting-For-800 said, the trustee could inquire. But there is nothing in bankruptcy law or the Constitution of the United States says you can't make strategic moves to file. Any way you lower your calculated 6 month average to less than the median income is acceptable. You can change jobs, go part time, take time off, etc. 

Message 3 of 6
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Valued Member

Re: Ch7 Job questions

thank you!
Message 4 of 6
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Community Leader
Super Contributor

Re: Ch7 Job questions

I would agree with the above posters...

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Message 5 of 6
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Valued Member

Re: Ch7 Job questions

ok probably stupid wuestion but I assume expenses imcludes all the payments to debtors as well? ive quit paying them so of course we could have extra now but if i start paying again we won't..
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