I'm getting ready to be laid off with no hope of finding a job making anywhere near my current salary. With half of our income being gone we won't be able to make our bills anymore. However, our income over the past 6 months puts us well over the median income on the means test. The problem is that with the average wage I will probably be earning when I find a new job won't allow anything extra to make a chapter 13 payment plan when looking at the allowable amounts for living expenses and utilities.
Yes, ch7 should be available to you. there was a case 8 or 9 years ago in which the debtor(s) named Lanning had lost their job and needed to adjust their chapter 13 payment to take their new, lower income into account. The Supreme Court said that rather than use a different time period for the means test, that the court should take into consideration those changes which either have occurred or are virtually certain to occur and make adjustments accordingly. Lanning was a Ch13 case, but the logic has been applied in lots of Ch7 cases. Consult with some local bk attorneys and retain the one who seems most knowledgeable and with you whom you get along well. Don't shop by price. A good lawyer is rarely cheap and a cheap lawyer is rarely good.
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I agree with Mr. Caldwell. There could be opportunities for you to consider Chapter 7. As he said, you would want to consult with an experienced bankruptcy attorney to review your options as soon as possible.
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Mr. Caldwell's point is interesting but would require the debtor to argue that he/she qualifies under the means test, where the numbers suggest there is a presumption of abuse, due to an expected decrease in income, thus leaving the ultimate viability of his/her chapter 7 filing up to the judge to decide. His/her attorney would have to expect to argue against an expected US Trustee motion objecting to discharge under chapter 7 and charge the debtor a fee commensurate with handling such an expected problem. I think a better tactic would be to simply wait until the household does qualify for a chapter 7. The asker is facing a period of unemployment followed by an expected lower wage when he/she finds employment. It would seem at some point this household would qualify to file chapter 7 with the standard six month look back and not have to hope to prevail against a UST motion objecting to discharge under chapter 7. My advice is to wait to file chapter 7 when you do qualify. Time passing and lower income will solve this problem. After the layoff occurs, need to discuss this with experienced counsel to find out when filing would be possible. File when you do qualify for chapter 7.
Good luck with the job and the bankruptcy.
Jay Simon has hit it right on the head. Each month you wait will cause a decrease in your 6 month average income. Typically, part of pre-bankruptcy planning is to simply do the calculation each month & plug the numbers into the means test calculation. You'll get there, & before your creditors can cause you much difficulty.
Blessings as you go!
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