Determining what are reasonable expenses

[Pattonator]

Hello, I'm in a bind and my wife and I are getting court notices from some old debts and we are looking at the potential of the Ch 13 route to handle these but we have some questions that an attorney in consultation did not give me clear answers on.

We have a number of pets and 4 of them have pet insurance premiums on a monthly basis. We have chosen the path of pet insurance as we have known costs each month for pet insurance rather than some surprise $1000-$10000 expense that we cannot pay. Are these pet insurance premiums considered to reasonable by a trustee?

Next issue is that we have a competitive gymnast who is nationally ranked and we spend quite a bit on gymnastics between monthly fees, private coaching, leotards and occasionally travel to competitions. I'd estimate that this costs us between $7-$8k/year. While I can certainly understand someone saying that gymnastics is not a necessary expense we don't want to have to have our daughter quit something she excels at because we had some old debt. I can certainly go with buying fewer clothes and other entertainment expenses to pay for part of this. The question is whether or not a trustee might also allow some expenditure for a child's sports.

Thank you for your input.

[justbroke]

Unfortunately, only a local Chapter 13 bankruptcy attorney is going to be answer those questions. Some Chapter 13 Trustee are more considerate of special circumstances and others will be more strict. It would be your attorney that fights for you to keep these uncommon expenses.

Why wouldn't just file a Chapter 7? Are you trying to protect property (house, car)? If you are trying to protect property, then the protections of a Chapter 13 is what is going to help you. You may need to give up some things for that, or may come to the realization that you just can't afford all of the things that you have and/or want.

[Pattonator]

I don't qualify for a Ch 7 with my wife and my income combined we are so far away from the median and the means test doesn't get us there. I'm not sure if you have to commit to what the Trustee says or can walk away at that point that it is calculated.

[justbroke]

A non-filing spouse's income is added to the Means Test and the Schedule I calculations. You would still include your spouse's income, but you can then offset that income by their expenses paid to their sole creditors. In other words, their income will count up to what they reasonably expect to pay (payroll taxes, insurance, etc) to the extent that the income is not used to pay for your -- as the debtor -- cost of living.

Since a Chapter 13 is entirely voluntary, you can have your case dismissed at any point.