So you passed the Means Test and are eligible to file under Chapter 7. That means you're in the clear, right? Not necessarily.
In most cases, it is true that passing the means test will also mean that Chapter 7 is an option for you. However, that is really only the first step to pass. Your Trustee may still object to your Chapter 7 bankruptcy, even if there is no "presumption of abuse" under the Means Test.
The next thing the your Trustee will look at is your monthly expenses compared to your monthly income. If you have too much "excess income" the Trustee will insist on you converting to a Chapter 13 repayment plan. So, if you complete your schedules and you end up with a couple hundred dollars of income above your monthly expenses, that is a problem. For that reason, it is very important to calculate your monthly expenses accurately. Make sure that you include all of your expenses. For instances, you are allowed entertainment expenses, day care, new baby expenses, pet expenses, personal grooming, education expenses for you and your minor children, etc. Unfortunately, one thing that you are not allowed is a contribution to a 401(k) or other retirement plan or even to repay a loan from a 401(k). So, if a large amount is being dedicated to either of those in a month, it may cause a problem.
Another thing a Trustee may object to is loan payments on unnecessary items. So, you may have an asset with a loan against it so that the asset has little or no equity. You may think that is great because you can exempt the asset and keep it. However, if the Trustee determines that you don't need that asset, you may still end up not only losing the asset but also being forced into a Chapter 13.
One example of this is owning an extra parcel of real estate. Oddly enough, if you have a cottage on it, you will likely be able to keep the asset. However, if it is a vacant parcel that you do not have a current use for, the Trustee may very well decide that you do not need that lot. Another example that I have personally seen is a $20,000 tractor. Because the debtor was not a farmer, the Trustee determined that the tractor was really just a toy. So, even though it was exempt, the Trustee objected to the debtor keeping the tractor. This same rationale could apply to any number of assets, including things like expensive cars, boats, trailers, etc.
If the Trustee decides that one of your assets is a toy, the Trustee can force you to surrender the asset. As if that's not bad enough, you will then also likely be forced into converting your bankruptcy to a Chapter 13. The reason for that is that the loan payment and any amounts paid for insurance, taxes, operation, etc. are not now needed in your monthly budget. So, the money that was budgeted for those is now freed up and available to pay to your unsecured creditors.
The moral is, just because you qualify for Chapter 7 under the Means Test, don't automatically assume you are in the clear.
Take a good look at your entire petition and really analyze your assets and your expenses.
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