Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 9

26 Jan Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 9

If your lawyer tells you that the means test, or Form B22, is creating a problem in your bankruptcy case, make sure you have included every possible expense the law allows. Many expenses allowed by Form B22 are for items which are unique to some people, and your lawyer may not know about them. One such expense, “continued contributions to the care of household or family members,” is allowed on Line 35 of the Chapter 7 Form B22, and on the corresponding Line 40 of the Chapter 13 Form B22. The person being assisted must be elderly, chronically ill, or disabled. Be sure to bring such an expense to the attention of your lawyer if you have not already done so.

This expense is authorized by section 707(b)(2)(A)(ii)(II) of the bankruptcy law, and it is broader than the IRS standard upon which it is based. The person being assisted does not have be a relative or a dependent, and can simply be a household member. The category includes payments for the continued “care” or continued “support” of such a person. The expense must be actual, reasonable and necessary, but the law does not define these terms. The law states the expense allowed must be for the “continued” care or support of such a person, so apparently the contribution cannot be started after the bankruptcy is filed, but must have been occurring for some unknown period of time before filing the bankruptcy. Don’t fail to claim an expense such as this on Form B22, because claiming every possible expense will soon add up to a significant figure, which could make an important difference in your bankruptcy case.

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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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