Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 8

10 Dec Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 8

Form B22, which is your bankruptcy case “means test,” is used by the U.S. Trustee to see if you can afford a chapter 13 repayment bankruptcy case. If so, this usually excludes you from doing a chapter 7. The means test also can be used to establish what level of repayment your chapter 13 plan should provide to your creditors. This means you and your lawyer cannot afford to make any mistakes on Form B22, for example, by missing any expenses which ought to included on the form. Health care expenses is a category of expense for which your lawyer will never be able to provide a correct figure, unless you take the time to give her an accurate figure for all your monthly health care expenses.

On the health care expenses line of Form B22, the instructions say you should include all health care expenses not reimbursed by insurance, and that you should exclude health insurance payments, which are allowed on a different line of the form. The term “health care expenses” is not defined in the form or elsewhere. This presents the question of what is an allowed health care expense.

It seems likely that eyeglasses, contact lenses, and other eye care expenses would be allowed as health care expenses. Dental visits, fillings, tooth crowns, bridges, teeth cleanings, necessary root canal operations, and other dental expenses should also be allowed. Doctor visits, periodic physical examinations, medical prescriptions, and costs of chronic medical conditions are certainly included in the definition of health care expenses. In fact, any recurring expenditure that you need to make in order to care for your physical or psychological health ought to be allowed. Most people spend money on cold medicine, aspirin, ibuprofen, cough medicine, and other over the counter health care products. Some have weekly visits with a psychologist. All these things cost money, and if you incur these expenses you need to tell your lawyer about them.

Some expenses, such as health club memberships, might be medically necessary for some people but not for others.

The proper way to account for health care expenses on Form B22 is to calculate a monthly average expense figure for this category. You may need to document the expenses. You may also need to show that you have claimed a monthly average for expenses you only incur infrequently, such as teeth cleaning which might occur only once every six months or so, or physical examinations which might occur every year or two.

Health care expenses which are paid for by insurance are not allowed as an expense, because you don’t actually spend any money on such items. You should include only your out-of-pocket expenses that you actually incur. Also, health insurance premiums or health savings account contributions should not be counted here. There is a separate portion of Form B22 which allows an expense for such items.

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Craig Andresen is a Minnesota bankruptcy attorney who represents both consumers and small business owners in chapter 7 and chapter 13 cases. With thirty years experience, Mr. Andresen is a frequent speaker on the topics of stopping mortgage foreclosures, and stripping off second mortgages in chapter 13. His office is located in Bloomington just across the street from the Mall of America. Call his office at (952) 831-1995 for a free consultation about protecting your rights using bankruptcy.
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