Confusion re: form 22a and schedules I and J.

[Sebaatian]

Form 22a line 22 dismisses your house payment if it is over the standard, yet line 42 asks for your actualy house payment to be used as an allowed deduction? And also, why are schedule I amd J still used, with the advent of the means teats that is allegedly designed to determine ability to pay debts?

 

[Gregeney]

It's actually line 20b, and all it does is assure that if your mortgage payment is below the IRS standard, line 20b is to figure the correct amount to be added to your actual housing expense to reach the maximum allowable deduction for mortgage/rent expense.

Regarding the means test as opposed to Scheds I and J, a better question would be: What is the real usefulness of the means test? I'm afraid you'll find many people who don't think it has much point. It does not use current income data, although from its actual title, one would assume it should, and even income is defined differently for the means test and Sched I. If "the presumption of abuse arises" from the results of the means test, a rebuttal can be filed to explain that the debtor's true current financial situation is not reflected by the means test results. And in some cases, it may be much easier to pass the means test than to show eligibilty for a Chapter 7 in one's Schedules. (SS income, for example)

Ultimately, the Schedules really matter and the means test really doesn't. But the means test is mandatory and if one "fails" it, steps must be taken to allow a Chapter 7 case.

 

[Sebaatian]

Well put, that response.

I have actually decided that your view is correct- regardless of the means test, you can be in a predicament if you can't keep your income/expense ratio high in the schedules.