The following is a checklist that a bankruptcy attorney might use (including of all the items within each of the six steps in the means test and the credit counseling requirement).
Step 1: Determine the debtor’s CMI
_____ Received check stubs for the six-month period before filing. _____ Calculated total gross income (use six months of pay stubs). _____ Divided total gross income by 6. _____ All income sources included. _____ Social Security, unemployment and tax refunds excluded. _____ If a joint case, joint debtor’s pay stubs received for 6-month period before filing. _____ Debtor’s spouse’s income verified (not joined in petition). _____ Multiply CMI by 12 to reach ACMI. _____ Find the applicable “median family income” amount. _____ Compare debtor’s ACMI with the applicable median family income. _____ If income is less, proceed to file Chapter 7. _____ If income is more, proceed with means-test calculation.
Step 2: Determine necessary expenses
_____ Locate the applicable National Standards (i.e., one-, two-, three-, or four-person). _____ If more than four people in the debtor’s household, add the per-person addition to the appropriate number in the four-person table. _____ Locate the applicable Local Standards table from the U.S. Trustee’s website. Look for the state and county closest to the debtor’s residence. _____ Find the applicable housing and utility cost for the debtor. _____ Calculate debtor’s housing and utility costs pursuant to the table. _____ Deduct mortgage payment from housing costs. _____ Deduct any liens placed of debtor’s property (second mortgage). _____ Find the applicable transportation cost for the debtor. _____ One or two vehicles? _____ Calculate debtor’s transportation costs. _____ Do not include the car payment from transportation costs. _____ Calculate vehicle ownership costs. _____ Deduct car payment from ownership costs. _____ Do not insert any negative numbers. _____ Calculate any taxes due. _____ Calculate any insurance premiums. Do not include homeowners, auto, renters, or whole life. _____ Calculate court-ordered payments. _____ Any expenses for healthcare? _____ Any expenses for child care? _____ Any expenses for debtor to produce an income? _____ Total all necessary expenses.
Step 3: Determine additional expenses
_____ Calculate 5% of living expenses in the National Standard. _____ Include documentation of necessary living expenses in excess of National Standard. _____ Calculate health insurance, disability insurance and health savings account. _____ Calculate expenses for elderly, ill or disabled family member. _____ Calculate monthly educational expenses for minor children (cannot exceed $125 per child per month). _____ Multiply monthly educational expense by the number of minor children. _____ Calculate home energy expenses in excess of IRS Local Standards. _____ Obtain copy of debtor’s monthly energy bills to support expense. _____ Deduct Local Standard energy allowance from total energy expenses. _____ Calculate excess energy expenses. _____ Calculate total additional expenses.
Step 4: Determine secured monthly expenses
_____ Obtain total of all secured debts and priority claims (mortgage, car payment, domestic support). _____ Debtor in arrears on any secured debt (mortgage, car payment, domestic support)? _____ Determine total of all arrearages and add to gross total. _____ Determine gross total for 60 months by examining the terms of the debts. _____ Divide the gross total by 60. _____ Total is debtor’s monthly payment for secured debts. _____ Determine trustees fees for debtor’s area if Chapter 13. _____ Add to debtor’s monthly payment for secured debts.
Step 5: Determine net CMI
_____ Add necessary expenses, additional expenses, and secured debt expenses to arrive at the total expense deduction. _____ Subtract the expense deduction from the CMI calculated in Step 1. _____ Total is the debtor’s net CMI.
Step 6: Determine if a presumption of abuse exists
_____ If debtor’s monthly net CMI is less than $109.58, no presumption of abuse exists. _____ If debtor’s monthly net CMI is $182.50 or more, a presumption of abuse exists. May file or convert under Chapter 13. _____ If debtor’s net CMI is between $109.58 and $182.50, calculate the total of debtor’s unsecured debts. _____ Divide the total unsecured debts by 60. _____ Is debtor’s net CMI enough to pay 25 percent of the unsecured debts? _____ If no, there is no presumption of abuse. _____ If yes, a presumption of abuse exists.
Credit counseling
_____ Did debtor attend a pre-petition counseling session? _____ Is counseling program approved by the U.S. Trustee? _____ Get list of approved programs from clerk of the Bankruptcy court. _____ Obtain certificate of completion from debtor. _____ Obtain plan of repayments of debts, if any. _____ File certificate and plan with court. _____ Did debtor attend a pre-discharge financial management class? _____ Class approved by the U.S. Trustee? _____ Obtain certificate of completion from debtor. _____ File certificate of completion with the court at least ten days prior to discharge or within 60 days of the meeting of creditors.
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