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  1. #1
    Join Date
    Dec 2015
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    Default How do Voluntary Payments to Charity or Family Members Affect the Means Test

    My question involves bankruptcy in the state of: Washington

    We are trying to qualify for Chapter 7 and have a few questions about the means test.

    1. Currently, we are above the median income for Washington State and the only way to qualify for chapter 7 is to increase our church donations to $975 per month, which is allowed by law since this falls under 15% of our income. Would this be an issue?

    2. My wife sends money to the Philippines monthly (around $300) to help support her parents since they are very poor. Can we include these expenses as deduction since we WILL keep sending these payments?

  2. #2
    Join Date
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    Default Re: How do Voluntary Payments to Charity or Family Members Affect the Means Test

    Quote Quoting elidoe
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    1. Currently, we are above the median income for Washington State and the only way to qualify for chapter 7 is to increase our church donations to $975 per month, which is allowed by law since this falls under 15% of our income. Would this be an issue?
    If the trustee sees that you have increased your charitable contributions above their historic levels, and concludes that your reason for doing so is to simply to pass the means test, the trustee may disallow the increased deduction.
    Quote Quoting elidoe
    My wife sends money to the Philippines monthly (around $300) to help support her parents since they are very poor. Can we include these expenses as deduction since we WILL keep sending these payments?
    Making gifts will not reduce your income. Excessive gifts may be subject to being treated as improper preferences, which must be restored to the bankrupt estate.

    You should discuss your situation with a bankruptcy lawyer.

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