Source: http://www.busby-lee.com/means-test-calcultor/
Timestamp: 2019-04-20 20:51:31+00:00

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For Cases Filed On and After November 1, 2018.
Despite what you may have heard about recent changes in bankruptcy law, most people who need bankruptcy protection are still eligible. Are you? This calculator will help you find out.It applies the formulas, regional income and expense standards, and calculations of the new "means test" that was a cornerstone of BAPCPA, the bankruptcy law (11 U.S.C. 707(b)). It uses the language and formatting of Official Form 122A-- one of several forms you would need to complete if you decide to file for bankruptcy. Read the instructions carefully. If you are unsure whether an item applies to your situation, make a note of your question. Ask a bankruptcy lawyer about it if you go for a free consultation.
If your monthly household income is less than the Texas Houston area median income for a household of your size, you are presumed to be eligible to file for Chapter 7 bankruptcy under Section 707(b)(2).
Compare your household income to the SouthWest area median income.
Chapter 7 is an option.
Must complete means test to determine if Chapter 7 is available.
11 U.S.C. Sec. 707(b)(7) exclusion.
Select the number of people in your household.
The bankruptcy law determines your income by looking at your household income during the six full calendar months before your bankruptcy filing .
If your income declined suddenly within the past six months and has not yet increased, waiting until after the first of the month to file will lower your monthly income figure used for the means test. That is, even if you don't qualify this month, you may qualify after the first of next month, or the month after that, if your income remains below the average monthly income for your state.
You may have noticed already that changing the number of persons in the household dramatically affects the median income figure. You can't include a roommate who is not your dependent in your household size, yet you may have to include the portion of their income that contributes to the overall income of the household. See the help topic on that subject.
If your six-month household income was more than $24,474, don't fret and keep scrolling.
You probably still qualify for Chapter 7, but you'll need to answer more questions to find out. Most people qualify once all factors are taken into account.
This site will point you to numerous books, articles and services that can help you figure out whether it makes sense for you to file for bankruptcy.
However, this website cannot answer whether you, specifically, should or should not file for bankruptcy.
If you're still not sure whether bankruptcy is right for you, you may want to seek credit counseling from a reputable agency or consult a lawyer .
Complete Parts 1 and 2 of the calculator to make sure that you've properly computed your income. Although you are not legally required to complete the "expenses" part of the means test form, you may want to anyway to get a sense of how a judge or trustee might view your ability to pay.
Some judges look to your ability to pay as part of the "totality of the circumstances" test (Section 707(b)(3)), and will bar you from Chapter 7 Bankruptcy, regardless of whether your income is above or below the median.
Bottom line: Whatever your income, if the calculator indicates that you have money left over after expenses, study the list of allowed expenses in the means test form and fill in any that apply.
Another thing to worry about: Some judges may rely on different required forms as guides in looking at the "totality of the circumstances" under 707(b)(3): Specifically Form 106I, Schedules I and J . These forms also deal with income and expenses but can yield a different "disposable income" result than the means test form (Form 22A) because different things are allowed and excluded on each form. Most notably, the means test income formula (and this calculator) excludes income from social security benefits, while Schedule I does not. Whether your social security income can render you ineligible for Chapter 7 is an unsettled area of law. At least one court has ruled that, by enacting the means test as it did, Congress intended that social security income be excluded when determining chapter 7 eligibility, however, it still must be reported on Schedule I.
If you have significant income from social security benefits, be aware of this issue.
This calculator is based on Official Form B 122A-2 -- a form you must complete if you file for Chapter 7 bankruptcy. The calculator applies the official formula stated in federal law (11 U.S.C. 707(b)), and local expense standards published by the U.S. government, to give you a sense of whether you qualify for bankruptcy.
Some of the questions on the form may be difficult to interpret. The government has not published instructions for this form, but the committee report from Congress explains the purpose of each part of the form. You can view relevant excerpts from that report wherever you see a green question mark icon. This material is not written as an instruction manual, but it will help you understand the why the form is asking certain questions.
The bankruptcy means test is based on income and living expense averages that vary from state to state and county to county, and other factors, such as if you're Married (Part 1, Line 1) and how many vehicles on which you are making loan or lease payments and/or paying operational costs & upkeep (in Part 2, lines 12 & 13). The information you supply determines which income and expense deduction standards to apply. We ask these questions now so they don't get lost in the shuffle.
FAST TRACK: If you are not military and know your debts are consumer debts (e.g. credit cards, medical debts, auto loans, mortgage, rent) you can skip this section.
For Congressional Committee notes about this portion of the form, click here.
The chapter 7 form is amended to implement the temporary exclusion from means testing created by the National Guard and Reservists Debt Relief Act of 2008. That law amended § 707(b)(2)(D) for a period of three years by adding a new subsection (ii) to provide a temporary exclusion from the application of the means test for certain members of the National Guard and reserve components of the Armed Forces. The new temporary exclusion would last for the period that the qualifying debtor is on active duty or is performing a homeland defense activity, and for 540 days thereafter.
Because the exclusion for Reservists and National Guard members applies only for a defined period of time, it may expire during the course of the chapter 7 case filed by a debtor initially entitled to the exclusion. For that reason, a new check box is added to the top of the form that states that the “presumption is temporarily inapplicable.” A debtor who is entitled to claim the Reservists and National Guard exclusion at the commencement of the chapter 7 case may check that box.
The new exclusion applies only to a debtor who satisfies all of the requirements of § 707(b)(2)(D)(ii), and its expiration date depends on facts specific to each debtor. Therefore, in a joint case in which the exclusion in part 1C is claimed by either or both filers, each joint filer must complete a separate statement. If only one joint debtor qualifies for the exclusion in part IC, the other joint debtor must complete the form.
Part 1C is added to the form to allow qualifying debtors to claim the temporary exclusion under § 707(b)(2)(D)(ii). Debtors who declare under penalty of perjury that they satisfy all of the requirements of that provision are directed to verify their declaration in Part VIII and to check the “temporary presumption” box at the beginning of the form. They are not required to complete the remaining parts of the form for so long as the exclusion remains applicable.
A debtor who is or has been a Reservist or a National Guard member may qualify for the exclusion described in part 1C by being called to active duty service after September 11, 2001, for a period of at least 90 days, or while performing homeland defense activity for a period of at least 90 days. After the debtor has been released from active duty or has ceased performing homeland defense activity, the exclusion applies for a period of 540 days after the release date or cessation of homeland defense activity. Under those circumstances the debtor must state the date of release from active duty or the date on which the performance of homeland defense activity terminated.
If the Reservist and National Guard exclusion terminates during the course of a chapter 7 case – because of the expiration of the 540 day period following the release from active duty or the cessation of homeland defense activity – then the debtor may be required to complete the remaining parts of the form that are applicable to the debtor. If the exclusion terminates while a timely motion to dismiss under § 707(b)(2) may still be filed, Interim Rule 1007-I(n) requires that the debtor complete the remaining parts of the form no later than 14 days after the termination. If the obligation to complete the form arises in these circumstances and the debtor has not previously completed the form, the clerk is required to give the debtor notice of the obligation.
for a full copy of the committee report as a pdf file, click here .
The Chapter 7 form has several unique aspects. The form includes, in the upper right corner of the first page, a check box directing the debtor to state whether or not the calculations required by the form result in a presumption of abuse. The debtor is not bound by this statement and may argue, in response to a motion brought under § 707(b)(1), that there should be no presumption despite the calculations required by the form. The check box is intended to give clerks of court a conspicuous indication of the cases for which they are required to provide notice of a presumption of abuse pursuant to § 342(d).
Part I implements the provision of § 707(b)(2)(D) that excludes certain disabled veterans from all means testing, making it unnecessary to compute the CMI of such veterans. Debtors who declare under penalty of perjury that they are disabled veterans within the statutory definition are directed to verify their declaration in Part VII, to check the “no presumption” box at the beginning of the form, and to disregard the remaining parts of the form.
However, a debtor may be found to have asserted non-consumer status incorrectly. Unless such a debtor has filed the CMI form within the 45 days after filing the case, the case could be subject to automatic dismissal under § 521(i). To avoid this possibility, debtors asserting principally non-consumer status may complete the appropriate portions of Part I, claim an exclusion from the balance of the form, and promptly file the form. If it is subsequently determined that the debtor does have primarily consumer debts, the form will have been filed within the deadline established by § 521(i), and can be amended to include the necessary CMI and means test information.
Part II computes CMI for purposes of the safe harbor of § 707(b)(7). Section 707(b)(7) prohibits a motion to dismiss based on the means test’s presumption of abuse if the debtor’s annualized CMI does not exceed a defined median state income. For this purpose, the statute directs that CMI of the debtor’s spouse be combined with the debtor’s CMI even if the debtor’s spouse is not a joint debtor, unless the debtor declares under penalty of perjury that the spouses are legally separated or living separately other than for purposes of evading the means test.
Accordingly, the calculation of CMI in Part II directs a computation of the CMI of the debtor’s spouse not only in joint cases, but also in cases of married debtors who do not make the specified declaration, and the CMI of both spouses in these cases is combined for purposes of determining standing under § 707(b)(7).
Are You a Disabled Veteran?
The term "disabled veteran" means (A) a veteran who is entitled to compensation under laws administered by the Secretary for a disability rated at 30 percent or more, or (B) a veteran whose discharge or release from active duty was for a disability incurred or aggravated in line of duty.
The term "active duty" means full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.
In this chapter: (1) The term "homeland defense activity" means an activity undertaken for the military protection of the territory or domestic population of the United States, or of infrastructure or other assets of the United States determined by the Secretary of Defense as being critical to national security, from a threat or aggression against the United States.
THEN you are exempt from the means test.
Check this box if you meet these qualifications.
If your debts are not primarily consumer debt.
NEW: Temporary exclusion from means test, passed by Congress October, 2008, effective December 2008.
- for up to 540 days* after release.
* for 540 days thereafter (the “exclusion period”).
If you qualify for this temporary exclusion, (1) check the appropriate boxes and complete any required information in the Declaration of Reservists and National Guard Members below, (2) check the box for “The presumption is temporarily inapplicable” at the top of this statement, and (3) complete the verification in Part VIII. During your exclusion period you are not required to complete the balance of this form, but you must complete the form no later than 14 days after the date on which your exclusion period ends, unless the time for filing a motion raising the means test presumption expires in your case before your exclusion period ends.
I performed homeland defense activity for a period of at least 90 days, terminating on , which is less than 540 days before this bankruptcy case was filed.
Current Monthly Income (CMI) is the monthly average of certain income that you (and in a joint case, your spouse) received in the six calendar months before your bankruptcy filing.
(2) any amount paid by an entity or person other than you (or your spouse in a joint case) on a regular basis for your household expenses, your dependents, and (in a joint case) your spouse if not otherwise a dependent.
At the same time, the definition excludes from the averaged income "benefits received under the Social Security Act" and certain payments to victims of terrorism, war crimes, and crimes against humanity.
Among the changes introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was a set of interlocking provisions defining “current monthly income” and establishing a means test to determine whether relief under Chapter 7 should be presumed abusive. Current monthly income (“CMI”) is defined in § 101(10A) of the Code, and the means test is set out in § 707(b)(2). These provisions have a variety of applications. In Chapter 7, if the debtor’s CMI exceeds a defined level the debtor is subject to the means test, and§ 707(b)(2)(C) specifically requires debtors to file a statement of CMI and calculations to determine the applicability of the means test presumption. In Chapters 11 and 13, CMI provides the starting point for determining the disposable income that debtors may be required to pay to unsecured creditors. Moreover, Chapter 13 debtors with CMI above defined median income levels are required by § 1325(b)(3) to use the deductions from income prescribed by the means test in order to determine what part of their income is “disposable,” and pursuant to § 1325(b)(4), the level of CMI determines the “applicable commitment period” over which projected disposable income must be paid to unsecured creditors.
To provide for the reporting and calculation of CMI and for the completion of the means test where required, four separate official forms have been created—twoe for Chapter 7 and two for Chapter 13. This note first describes the calculation of CMI that is common to all of the forms, next describes the means test deductions set out in the Chapter 7 and 13 forms, and finally addresses particular issues that are unique to each of the separate forms.
Although Chapters 7 and 13 use CMI for different purposes, the basic computation is the same in each. As defined in § 101(10A), CMI is the monthly average of certain income that the debtor (and in a joint case, the debtor’s spouse) received in the six calendar months before the bankruptcy filing. The definition includes in this average (1) income from all sources, whether or not taxable, and (2) any amount paid by an entity other than the debtor (or the debtor’s spouse in a joint case) on a regular basis for the household expenses of the debtor, the debtor’s dependents, and (in a joint case) the debtor’s spouse if not otherwise a dependent. At the same time, the definition excludes from the averaged income “benefits received under the Social Security Act” and certain payments to victims of terrorism, war crimes, and crimes against humanity.
Each of the two forms provides for reporting income items constituting CMI. The items are reported in a set of entry lines—Part I of the form for Chapter 7 and Part I of the forms for and Chapter 13—that include separate columns for reporting income of the debtor and of the debtor’s spouse. The first of these entry lines includes a set of instructions and check boxes indicating when the “debtor’s spouse” column must be completed. The instructions also direct the required averaging of reported income.
The subsequent entry lines for income reporting specify several common types of income and are followed by a “catch-all” line for other income. The entry lines address (a) gross wages; (b) business income; (c) rental income; (d) interest, dividends, and royalties; (e) pension and retirement income; (f) regular payments of the household expenses of the debtor or the debtor’s dependents; (g) unemployment compensation, and (h) all other forms of income (the “catch-all” line).
Gross wages (before taxes) are required to be entered. However, consistent with usage in the Internal Revenue Manual and the American Community Survey of the Census Bureau, business and rental income are defined as gross receipts less ordinary and necessary expenses. Unemployment compensation is given special treatment. Because the federal government provides funding for state unemployment compensation under the Social Security Act, there may be a dispute about whether unemployment compensation is a “benefit received under the Social Security Act.” The forms take no position on the merits of this argument, but Forms 22A, 22B, & 22C Page 10 give debtors the option of reporting unemployment compensation separately from the CMI calculation. This separate reporting allows parties in interest to determine the materiality of an exclusion of unemployment compensation and to challenge it.
Alimony and child support are also given special treatment. Child support is not generally considered “income” to the recipient. See 26 U.S.C. § 71(c). Thus, child support is only part of CMI if it is paid on a regular basis for the household expenses of the debtor or the debtor’s dependents. On the other hand, alimony and other forms of spousal support are considered income to the recipient, and thus are within CMI regardless of the regularity and use of the payments. To address this distinction, the instruction in the entry line for regular payments of household expenses directs that the entry include regular child support payments used for household expenses of the debtor or the debtor’s dependents, and the instruction for the “catch-all” line directs inclusion of all spousal support payments that are not otherwise reported as spousal income.
The forms provide for totaling the income reporting lines.
Although Chapters 7, 11, and 13 use CMI for different purposes, the basic computation is the same in each. As defined in § 101(10A), CMI is the monthly average of certain income that the debtor (and in a joint case, the debtor's spouse) received in the six calendar months before the bankruptcy filing. The definition includes in this average (1) income from all sources, whether or not taxable, and (2) any amount paid by an entity other than the debtor (or the debtor's spouse in a joint case) on a regular basis for the household expenses of the debtor, the debtor's dependents, and (in a joint case) the debtor's spouse if not otherwise a dependent. At the same time, the definition excludes from the averaged income "benefits received under the Social Security Act" and certain payments to victims of terrorism, war crimes, and crimes against humanity.
Each of the forms provides for reporting income items constituting CMI. The items are reported in a set of entry lines—Part II of the Chapter 7 form and Part I of the forms for Chapter 11 and Chapter 13—that include separate columns for reporting income of the debtor and of the debtor's spouse. The first of these entry lines includes a set of instructions and check boxes indicating when the "debtor's spouse" column must be completed. The instructions also direct the required averaging of reported income.
The subsequent entry lines specify several common types of income and are followed by a "catch-all" line for other income. The specific entry lines address (a) gross wages; (b) business income; (c) rental income; (d) interest, dividends, and royalties; (e) pension and retirement income; (f) regular contributions to the debtor's household expenses; and (g) unemployment compensation. Gross wages (before taxes) are required to be entered. Consistent with usage in the Internal Revenue Manual and the American Community Survey of the Census Bureau, business and rental income is defined as gross receipts less ordinary and necessary expenses. Unemployment compensation is given special treatment. Because the federal government provides funding for state unemployment compensation under the Social Security Act, there may be a dispute about whether unemployment compensation is a "benefit received under the Social Security Act." The forms take no position on the merits of this argument, but give debtors the option of reporting unemployment compensation separately from the CMI calculation. This separate reporting allows parties in interest to determine the materiality of an exclusion of unemployment compensation and to challenge it. The forms provide for totaling the income lines.
Select the status that applies and complete the rest of this part of this statement as directed.
Note: If you choose "married - not filing jointly - separate household" you must be willing to declare, under penalty of perjury: "My spouse and I are legally separated under applicable non-bankruptcy law or my spouse and I are living apart other than for the purpose of evading the requirements of S 707(b)(2)(A) of the Bankruptcy Code."
All figures must reflect average monthly income for the six calendar months prior to filing the bankruptcy case, ending on the last day of the month before the filing. If you received different amounts of income during these six months, you must total the amounts received during the six months, divide this total by six, and enter the result on the appropriate line.
3 Gross wages (before taxes), salary, tips, bonuses, overtime, commissions .
5 Rent and other real property income . Do not include any part of the operating expenses entered on Line b as a deduction in Part V.
6 Interest, dividends, and royalties.
7 Pension and retirement income .
8 Any amounts paid by another person or entity, on a regular basis, for the household expenses of the debtor or the debtor's dependents, including child support paid for that purpose . Do not include alimony or separate maintenance payments or amounts paid by your spouse if Column B is completed. Each regular payment should be reported in only one column; if a payment is listed in Column A, do not report that payment in Column B.
Note: If you are sharing a household with one or more roommates or a domestic partner, you must include here all amounts that other members of the household regularly contribute to rent, house payments, or other household expenses.
10 Income from all other sources. Specify source and amount. If necessary, list additional sources on a separate page. Do not include alimony or separate maintenance payments paid by your spouse if Column B is completed, but include all other payments of alimony or separate maintenance. Do not include any benefits received under the Social Security Act or payments received as a victim of a war crime, crime against humanity, or as a victim of international or domestic terrorism.
11 Subtotal of Current Monthly Income for Â§ 707(b)(7) ("Median Income Test") . Add Lines 3 thru 10 in Column A, and, if Column B is completed, add Lines 3 through 10 in Column B. Enter the total(s).
Part 3 of the form provides for the comparison of the debtor's CMI to the applicable state median income for purposes of § 707(b)(7). It then directs debtors whose income does not exceed the applicable median to verify the form, to check the "no presumption" box at the Forms 22A, 22B, & 22C Page 6 beginning of the form, and not to complete the remaining parts of the form. Debtors whose CMI does exceed the applicable state median are required to complete the remaining parts of the form.
source: U.S. Trustee, standards for cases filed On And After November 1, 2018.
Application of Section 707(b)(7) "Median Income Test"
Because your household income does not exceed the median income for a household of similar size for your state, the presumption of abuse in your case does not arise; do not complete parts 4, 5, 6 or 7 of this form.
This section makes an adjustment between the income figure used for the median income test versus the figure used for the means test. The means test has slightly different rules regarding income of married couples who are living together if only one spouse is filing for bankruptcy.
Part 4 the form provides for an adjustment to the CMI of a married debtor, not filing jointly, whose spouse's CMI was combined with the debtor's for purposes of determining standing to assert the means test presumption.
The means test itself does not charge a married debtor in a non-joint case with the income of the non-filing spouse, but rather only with contributions made by that spouse to the household expenses of the debtor or the debtor's dependents, as provided in the definition of CMI in § 101(10A). Accordingly, Part IV calls for the combined CMI of Part II to be reduced by the amount of the non-filing spouse's income that was not contributed to the household expenses of the debtor or the debtor's dependents.
If your marital and filing status (Part2) is not married – not filing jointly – same household you may skip this section.
Adjustment to income if you are married and living together, but filing singly.
your dependents: Specify on a separate page the basis for excluding the Column B income (such as payment of the spouse's tax liability or the spouse's support of persons other than the debtor or the debtor's dependents) and the amount of income devoted to each purpose.
Total and enter on Line 17.
This section deals with allowable deductions from income to determine how much of your income is "disposable" and therefore could be used to pay your debts. Many deductions are allowed, including your monthly car loan and mortgage payments ( line42 ), in addition to "standard" deductions based on where you live and other factors.
What is the 'target number' you have to meet?
Unlike the first part of the test, the state median income is not relevant. What matters in this test is how much money you have left at the end of every month that could go towards paying off "unsecured" debts.
Can you afford, after expenses, to pay off at least $7,025 over the next 5 years ($117 per month over 60 months)? If you can, the law will require you to file for Chapter 13 instead of Chapter 7.
Over many years of collecting unpaid taxes, the IRS has established standards to tell its collection agents when to quit trying to extract money from delinquent taxpayers. These standards are rather elaborate, and take into account regional differences in housing and transportation costs.
When Congress wrote the bankruptcy means test, it decided to use the IRS standards as a starting point. As you will see in part 5B and 5C of the form, the bankruptcy means test also allows you to deduct several categories of extra expenses in addition to the "standard" deductions allowed by the IRS.
To view Congressional Committee Notes about this part of the form, click here.
The means test operates by deducting from CMI defined allowances for living expenses and payment of secured and priority debt, leaving disposable income presumptively available to pay unsecured non-priority debt. These deductions from CMI are set out in the Code at § 707(b)(2)(A)(ii)-(iv). The forms for Chapter 7 and Chapter 13 have similar sections (Parts V and IV, respectively) for calculating these deductions. The calculations are divided into subparts reflecting three different kinds of allowed deductions.
National Standards. The IRS National Standards provide a single allowance for food, clothing, household supplies, personal care, and miscellany, depending on household size, which can be entered directly from a table supplied by the IRS. There is also a National Standard for out-of-pocket health care expenses, which provides two different per-person allowances, depending on age group: the allowance for persons 65 or older is greater than the allowance for those under 65. Accordingly, the forms direct debtors to compute the National Standard allowance for health care by first multiplying each of the two age-group allowances by the number of household members within that age group and then adding subtotals for the two age groups to obtain the total allowance.
Local Standards. The IRS Local Standards provide one set of deductions for housing and utilities and another set for transportation expenses, with different amounts for different areas of the country, depending on the size of the debtor’s household and the number of the debtor’s vehicles. Each of the amounts specified in the Local Standards are treated by the IRS as a cap on actual expenses, but because § 707(b)(2)(A)(ii) provides for deductions in the “amounts specified under the . . . Local Standards,” the forms treat these amounts as allowed deductions.
The Local Standards for housing and utilities, as published by the IRS for its internal purposes, present single amounts covering all housing expenses; however, for bankruptcy purposes, the IRS has provided the Executive Office for United States Trustees with information allowing a division of these amounts into a non-mortgage component and a mortgage/rent component. The non-mortgage component covers a variety of expenses involved in maintaining a residence, such as utilities, repairs and maintenance. The mortgage/rent component covers the cost of acquiring the residence. The forms take no position on the question of whether the debtor must actually be making payments on a home in order to claim a mortgage/rent allowance. For homeowners with mortgages, the mortgage/rent allowance involves debt payment, since the cost of a mortgage is the basis for the allowance. Accordingly, the forms require debtors to deduct from the mortgage/rent allowance their average monthly mortgage payment, up to the full amount of the IRS mortgage/rent allowance, and instruct debtors that this average monthly payment is the one reported on the separate line of the forms for deductions of secured debt under § 707(b)(2)(a)(iii). The forms allow debtors to challenge the appropriateness of this method of computing the Local Standards allowance for housing and utilities and to claim any additional housing allowance to which they contend they are entitled, but the forms require specification of the basis for such a contention.
The IRS issues Local Standards for transportation in two components for its internal purposes as well as for bankruptcy: one component covers vehicle operation/public transportation expense and the other ownership/lease expense. The amount of the vehicle operation/public transportation allowance depends on the number of vehicles the debtor operates; debtors who do not operate vehicles are given a public transportation allowance, regardless of whether they actually use public transportation. It is not clear whether the public transportation allowance may also be claimed by debtors who do make use of public transportation but also operate vehicles. The forms permit debtors to claim both a public transportation and vehicle operating allowance, but take no position as to whether it is appropriate to claim both allowances. No debt payment is involved in the vehicle operation/public transportation component of the Local Standards for transportation.
The ownership/lease component, on the other hand, may involve debt payment. Accordingly, the forms require debtors to reduce the allowance for ownership/lease expense by the average monthly loan payment amount (principal and interest), up to the full amount of the IRS ownership/lease expense amount. This average payment is as reported on the separate line of the forms for deductions of secured debt under § 707(b)(2)(a)(iii). The forms take no position on the question of whether the debtor must actually be making payments on a vehicle in order to claim the ownership/lease allowance. Other Necessary Expenses. The IRS does not set out specific dollar allowances for “Other Necessary Expenses.” Rather, it specifies a number of categories for such expenses, and describes the nature of the expenses that may be deducted in each of these categories. Section 707(b)(2)(a)(ii) allows a deduction for the debtor’s actual expenses in these specified categories, subject to its requirement that payment of debt not be included. Several of the IRS categories deal with debt repayment and so are not included in the forms. Several other categories deal with expense items that are more expansively addressed by specific statutory allowances. Subpart A sets out the remaining categories of “Other Necessary Expenses” in individual entry lines. Instructions in these entry lines reflect limitations imposed by the IRS and the need to avoid inclusion of items deducted elsewhere on the forms.
Subpart A concludes with a subtotal of the deductions allowed under the IRS standards.
Enter in Line b1 the number of members of your household who are under 65 years of age, and enter in Line b2 the number of members of your household who are 65 years of age or older. (The applicable number of persons in each age category is the number in that category that would currently be allowed as exemptions on your federal income tax return, plus the number of anyadditional dependents whom you support.) Multiply Line a1 by Line b1 to obtain a total amount for household members under 65, and enter the result in Line c1. Multiply Line a2 by Line b2 to obtain a total amount for household members 65 and older, and enter the result in Line c2.
Add Lines c1 and c2 to obtain a total health care amount, and enter the result in Line 19B.
Select the number of vehicles for which you pay the operating expenses or for which the operating expenses are included as a contribution to your household expenses in Line 8 .
Note: You are entitled to this expense allowance regardless of whether you pay the expenses of operating a vehicle and regardless of whether you use public transportation.
source: U.S. Trustee, standards for cases filed On and After May 15, 2015.
Vehicle Ownership / Lease Allowance for Vehicle 1.
24 Vehicle Ownership / Lease Allowance for Vehicle 2.
Unlike the parts this section -- which use 'standard' amounts for each expense -- here you can deduct 'actual' expenses in a broad category called "other necessary expenses." You must be able to provide proof of these expenses.
Enter the total average monthly expense that you actually incur for all federal, state and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, social security taxes, and Medicare taxes. Do not include real estate or sales taxes.
Enter the total average monthly payroll deductions that are required for your employment, such as mandatory retirement contributions, union dues, and uniform costs. Do not include discretionary amounts, such as voluntary 401(k) contributions.
Enter average monthly premiums that you actually pay for term life insurance for yourself. Do not include premiums for insurance on your dependents, for whole life or for any other form of insurance.
Enter the total monthly amount that you are required to pay pursuant to court order, such as spousal or child support payments. Do not include payments on past due support obligations included in Line 44 .
29 Education for employment or for a physically or mentally challenged child.
Enter the total monthly amount that you actually expend for education that is a condition of employment and for education that is required for a physically or mentally challenged dependent child for whom no public education providing similar services is available.
Enter the total average monthly amount that you actually expend on childcare. —such as baby-sitting, day care, nursery and preschool. Do not include other educational payments.
Do not include payments for health insurance or health savings accounts listed in Line 34.
Enter the total average monthly amount that you actually pay for telecommunication services other than your basic home telephone and cell phone service—such as pagers, call waiting, caller id, special long distance, or internet service—to the extent necessary for your health and welfare or that of your dependents. Do not include any amount previously deducted.
These are expenses that are not part of the IRS collection standards, but rather added by Congress when they drafted the new bankruptcy law. These deductions are in addition to the expenses allowed under the IRS collection standards.
In addition to the expense deductions allowed under the IRS standards, the means test makes provision—in subclauses (I), (II), (IV), and (V) of § 707(b)(2)(A)(ii)—for six special expense deductions. Each of these additional expense items is set out on a separate entry line in Subpart B, introduced by an instruction that tracks the statutory language and provides that there should not be double counting of any expense already included in the IRS deductions.
One of these special expense deductions presents a problem of statutory construction. Section 707(b)(2)A)(ii)(I), after directing the calculation of the debtor’s monthly expenses under the IRS standards, states, “Such expenses shall include reasonably necessary health insurance, disability insurance, and health saving account expenses . . . .” There is no express statutory limitation to expenses actually incurred by the debtor, and so the provision appears to allow a reasonable “monthly expense” deduction for health and disability insurance or a health savings account even if the debtor does not make such payments, similar to the way in which the National Standards give an allowance for food, clothing and personal care expenses without regard to the debtor’s actual expenditures. However, the statutory language might also be read as providing that the debtor’s “Other Necessary Expenses” should include reasonable insurance and health savings account payments. Since “Other Necessary Expenses” are limited to actual expenditures, such a limitation could be implied here. The forms deal with this ambiguity by allowing the debtor to claim a deduction for reasonable insurance and health savings account expenses even if not made, but also require a statement of the amount actually expended in these categories, thus allowing a challenge by any party who believes that only actual expenditures are properly deductible.
Contributions to tax-exempt charities provide another statutory expense deduction. Section 707(b)(1) provides that in considering whether a Chapter 7 filing is an abuse, the court may not take into consideration “whether a debtor . . . continues to make [tax-exempt] charitable contributions.” Section 1325(b)(2)(A)(ii) expressly allows a deduction from CMI for such contributions that are “reasonably necessary” (up to 15% of the debtor’s gross income), and the Religious Liberty and Charitable Donation Clarification Act of 2005 added language to § 1325(b)(3) to provide the same deduction for above-median income debtors whose disposable income is determined using means test deductions. Accordingly, Subpart B of both the Chapter 7 and Chapter 13 forms includes an entry line for charitable contributions, employing the different statutory deductions allowed in each context.
The Subpart B concludes with a subtotal of the additional statutory expense deductions.
Health Insurance, Disability Insurance, and Health Savings Account Expenses . List the monthly expenses in the categories set out in lines a-c below that are reasonably necessary for yourself, your spouse, or your dependents.
35 Continued contributions to the care of household or family members. Enter the actual monthly expenses that you will continue to pay for the reasonable and necessary care and support of an elderly, chronically ill, or disabled member of your household or member of your immediate family who is unable to pay for such expenses.
36 Protection against family violence. Enter the total average reasonably necessary monthly expenses that you actually incurred to maintain the safety of your family under the Family Violence Prevention and Services Act or other applicable federal law. The nature of these expenses is required to be kept confidential by the court.
37 Home energy costs. Enter the total average monthly amount, in excess of the allowance specified by IRS Local Standards for Housing and Utilities, that you actually expend for home energy costs. You must provide your case trustee with documentation of your actual expenses, and you must demonstrate that the additional amount claimed is reasonable and necessary.
38 Education expenses for dependent children less than 18. Enter the average monthly expenses that you actually incur, not to exceed $147.92 per child, in providing elementary and secondary education for your dependent children less than 18 years of age. You must provide your case trustee with documentation of your actual expenses, and you must explain why the amount claimed is reasonable and necessary and not already accounted for in the IRS Standards.
39 Additional food and clothing expense. Enter the average monthly amount by which your food and clothing expenses exceed the combined allowances for food and apparel in the IRS National Standards, not to exceed $19 (five percent of those combined allowances.) (This information is available at www.usdoj.gov/ust/ or from the clerk of the bankruptcy court.) You must demonstrate that the additional amount claimed is reasonable and necessary.
40 Continued charitable contributions. Enter the amount that you will continue to contribute in the form of cash or financial instruments to a charitable organization as defined in 26 U.S.C. § 170(c)(1)-(2).
The means test places no limits on deductions for mortgages or car loans. All secured debts for a car or home can be deducted.
If you are claiming deductions for payments on property that you plan to surrender to the creditor during bankrupcty, note that many courts will not allow that deduction. Check with an attorney in your area to determine what courts allow in your area.
As noted above, the means test is just one factor that courts and trustees look at when reviewing cases for abuse. Even if you pass the means test, section 707(b)(3) allows a judge to refuse a Chapter 7 discharge based on a "totality of circumstances" which can include cases of excessive secured debts for luxury items.
Subpart C deals with the means test’s deductions from CMI for payment of secured and priority debt, as well as a deduction for administrative fees that would be incurred if the debtor paid debts through a Chapter 13 plan.
In accord with § 707(b)(2)(A)(iii), the deduction for secured debt is divided into two entry lines—one for payments that are contractually due during the 60 months following the bankruptcy filing, the other for amounts needed to retain necessary collateral securing debts in default. In each situation, the instructions for the entry lines require dividing the total payment amount by 60, as the statute directs. The forms recognize another ambiguity in this connection: “payments contractually due” might either be understood as limited to payments of principal and interest (payable to secured creditor) or, in the context of a mortgage with an escrow, might be understood as including payments of property taxes and insurance (ultimately paid to taxing bodies and insurers, but initially payable to the mortgagee). The forms require the debtor to specify whether the amount deducted includes taxes and insurance, allowing a party in interest to inquire into the deduction and raise an objection.
Priority debt, deductible pursuant to § 707(b)(2)(A)(iv), is treated on a single entry line, also requiring division by 60. The instruction for this line makes clear that only past due priority debt—not anticipated debts—should be included. Thus, future support or tax obligations, and future fees that might be payable to a Chapter 13 debtor’s attorney, are not included.
The defined deduction for the expenses of administering a Chapter 13 plan is allowed by § 707(b)(2)(A)(ii)(III) only for debtors eligible for Chapter 13. The forms treat this deduction in an entry line requiring the eligible debtor to state the amount of the prospective Chapter 13 plan payment and multiply that payment amount by the percentage fee established for the debtor’s district by the Executive Office for United States Trustees. The forms refer debtors to the website of the U.S. Trustee Program to obtain this percentage fee.
The subpart concludes with a subtotal of debt payment deductions.
42 Future payments on secured claims. For each of your debts that is secured by an interest in property that you own, list the name of the creditor, identify the property securing the debt, state the Average Monthly Payment, and check whether the payment includes taxes or insurance. The Average Monthly Payment is the total of all amounts scheduled as contractually due to each Secured Creditor in the 60 months following the filing of the bankruptcy case, divided by 60. If necessary, list additional entries on a separate page. Enter the total of the Average Monthly Payments on Line 42.
Name of Creditor Property Securing the Debt Average Monthly Payment Does payment include taxes or insurance?
43 Other payments on secured claims . If any of debts listed in Line 42 are secured by your primary residence, a motor vehicle, or other property necessary for your support or the support of your dependents, you may include in your deduction 1/60th of any amount (the “cure amount”) that you must pay the creditor in addition to the payments listed in Line 42, in order to maintain possession of the property. The cure amount would include any sums in default that must be paid in order to avoid repossession or foreclosure. List and total any such amounts in the following chart. If necessary, list additional entries on a separate page.
Chapter 13 administrative expenses. If you are eligible to file a case under Chapter 13, complete the following chart, multiply the amount in line a by the amount in line b, and enter the resulting administrative expense.
Your projected Chapter 13 expense may be a different amount, depending on such factors as whether mortgage payments would be paid through the Chapter 13 plan or outside it.
If you would like to use a different projected Chapter 13 payment, enter it here.
Otherwise, leave this field blank.
Amount you could pay in a hypothetical five-year Chapter 13 plan.

References: § 707
 § 707
 § 707
 § 707
 § 707
 § 342
 § 707
 § 521
 § 521
 § 707
 § 707
 § 101
 § 707
 § 1325
 § 1325
 § 101
 § 71
 § 101
 V.

 § 707
 § 101
 § 707
 § 707
 § 707
 § 707
 § 707
 § 1325
 § 170
 § 707
 § 707
 § 707