Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 14

18 Feb Means Test: Don’t Give Up, Even If You Think You’ve Flunked It, Part 14

In a chapter 7 or 13 bankruptcy case, it’s important to take an expense on the the means test form (Form B22A or B22C) for all allowable portions of your monthly home mortgage payment. Line 42 of Form B22A, or Line 47 of Form B22C, is where this expense should be listed. If your mortgage payment consists of principle, interest, property tax, and insurance (PITI), the amount of the regular monthly mortgage payment is the figure which should be entered on Line 42 or 47.

Note that it doesn’t matter whether you are keeping your home or surrendering it in the bankruptcy; you are entitled to the expense for the mortgage payment as long as the payment was contractually due on the date you file your bankruptcy case. This is because the form instructs you to list the amount “contractually due,” and doesn’t concern itself with whether payments are being made.

If your mortgage payment doesn’t include property tax or insurance, make sure you add the average monthly payments for those items also. These expenses are allowed because the mortgage note requires you to pay these items, or else you are in default and the mortgage holder can foreclose on your home. Thus, the average monthly payment for property tax and insurance is a secured obligation, the payment of which is necessary to keep the home.

Those living in a townhome or other community which requires payment of a monthly homeowners association fee should include the average monthly payment for this on Line 42 or 47 also. Again, the reason this expense is allowable is that the mortgage note requires you to pay the association fee each month. Also, the association is likely a secured creditor in its own right; this forms an additional basis for including the average monthly association fee on Line 42 or 47.

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Craig W. Andresen is a consumer bankruptcy lawyer in Bloomington, Minnesota, with 22 years’ experience in consumer and small business bankruptcy cases. He is the Minnesota chair of the National Association of Consumer Bankruptcy Attorneys, and is a member of the Minnesota State Bar Association’s Bankruptcy Section. Mr. Andresen lectures often on the topic of consumer bankruptcy at local and national legal seminars.
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