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Tried to File Chapter 7 but Trustee pushing us into 13.


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I have income a little above the median.  I have about $16K in secured debt with another $43K in unsecured.  I pass the means test with about $150 left over so it is not an abusive Chapter 7.  My problem is the Trustee is not going to allow some of the IRS standard expenses for transportation (the loans) and is going to force me into Chapter 13 or dismissal.  I was going to reaffirm the car loans and continue paying.  My attorney states the Trustee is using a clause that says something about reasonableness.  Is there anything we can do or just accept the 13?

 

If pushed into 13 my monthly payments are going to be very high so I would like to stay with the 7.

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There are two ways a trustee can object to your Chapter 7.  One is through the very mechanical and objective means test way.  This is a straight "do the #s work or do they not work" type of black and white test.   If not, the trustee could bring a motion to dismiss or convert (and technically bill you for his/her time in preparing and prosecuting the motion).  The second way the trustee can object is through a very subjective "totality of the circumstances" test.   Think "waverunners and second homes".  This is a subjective test where the trustee thinks it would be abusive to allow your bk to go through. 

 

I'm not sure where we are here with what s happening with you.   If you believe you are in good grounds, then have the trustee bring the motion and have your attorney ANSWER it.  The trustee doesn't conrol your case- the judge does.   So the trustee can make any argument they want to, but the judge has to find in favor of your trustee in order for the trustee to get their wish.  Every case is different, but if I were your attorney I'd probably pick the phone up, discuss with the trustee, and get details of the trustee's concern.  Then I'd assess if you are in good grounds or not.  If not, then convert voluntarily before the trustee forces you to...if you are on good grounds, then have your attorney answer the motion.  Judges do not like to see these types of actions unless the case is truly abusive.

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