Five years after BAPCPA, I’m still grinding my teeth about the inanity of the means test. It consumes a huge amount of my time, gathering numbers about the cost of telecommunications services and my client’s projected costs of health care. I get to know more about their ailments than anyone but their spouse and their doctor. For what? Tell me what real meaning lies therein as a measure of the client’s future financial situation?
The basic failings of the means test is well known to computer programmers: garbage in, garbage out. In other words, the end product is no better than the information on which it’s based. And we start with the means test that looks backward for income as though that has any necessary connection to the future. It is the client’s future we’re looking at, their ability to perhaps repay their unsecured creditors.
The other, absolutely mind wrenching feature of the means test is the issue of household size: what to do with shared custody situations; children at college; resident elders who may have some income spent on themselves. What about the exchange student, the adult kids come home, and the recent marriage? Yet household size (or is it number of dependents, or family size?) drives the size of a number of the standard allowances on the means test.
I end up needing to know far more than comfortable about who pays for what, how roommates handle the fridge, and what the prospects for a bonus this year are. Worse, do I need to probe for the likelihood the client will lose their job?
It is absolutely infuriating when the means test disqualifies the client who pays their taxes, drives a paid-for car, and rents. Isn’t that behavior that we should applaud rather than penalize? Instead, the client who owes back taxes, underwithholding, big mortgage payments and newish cars fares better on the test.
I find my anger has fueled my commitment to push back at a legislative mindset that thinks that families are subject to “testing” as to their entitlement to get a fresh start. Even more presumptuous is the thought that there is one, mechanical test for that entitlement. My partner and I end up sitting across my desk, with files open, stacks of bills, and an adding machine, breaking the numbers up, rethinking our assumptions, double checking our work so our clients get a choice of chapter.
I feel about this like I feel about the tax code: it’s so ridiculously difficult and a diversion of brain power that could otherwise be put to more productive uses. The best revenge, short of repeal, that I can devise is to be damn good at it.
That’s one reason why I’m releasing my 2-hour means test class tomorrow morning (Wednesday, October 27, 2010) – to help teach as many people as possible about the intricacies of the means test and how to simplify it. It will be immediately available for your consumption, and you’ll be able to watch it as often as you like.
I’m giving a first crack at the program – with a heavy discount for those who move quickly – to those who are email subscribers and receive automatic updates to this site. If you’d like to be added to the list, just send a blank email to email@example.com. It’s free, easy, and your information will never be shared or sold.
See you tomorrow.