which expenses count in a ch13?

[spmtf]

Do actual expenses count toward your NDI, or is it just what is determined from the IRS allowances. For example, I spend $300 a month on cigarettes. Would these be allowed.

[bkstuff]

I would not think so....you would need to bring down other areas to pay for the cigs , I think.

[justbroke]

Most Trustees are not going to allow expenses for cigarettes.

Having wrote that, here's the deal. Your Disposable Monthly Income (DMI) is the remainder of your Income less your allowed expenses. The emphasis is on allowed. Allowed expenses can easily be seen on the Official Form B22C (Calculation of Current Monthly Income...). Yes, these are based on the IRS guidelines and have been slightly rearranged for use in Bankruptcies, but the data comes from the IRS and Census.

You may be allowed, for example, $1,300 a /month for food and clothing for a family of 4. If you can still feed and clothe your family for $1,100/month, feel free to buy $200/month on cigarettes. However, what you should be doing with the $200/month extra, is saving it. Enough can't be said about actually budgeting and building your raining day fund, because it is going to rain... trust me. I just put 2 new tires on my car, which I wasn't expecting. That was $215 that I easily took out of the bank to pay without worry because I have some savings.

So, yes... it is your actual expenses, but it's your actual allowed expenses.

[forgotten]

Cigatettes are actually allowed in my district. The judge ruled in favor multiple times so the trustee has stopped objecting.

The argument was that it is an addiction and it is legal, it is not easy for the debtor to stop just because they can/should. Being an addiction that produces heavy withdraw which can affect the debtors ability to concentrate and work to produce income it can be said it is nesscary for the debtors reorganization.

So, you may be able to argue it. If you can pad other areas instead to make up for it though you are going to have an easier time.

[spmtf]

So if you are supposed to be giving all disposable income to the trustee how can you explain having money in the bank?

[justbroke]

So if you are supposed to be giving all disposable income to the trustee how can you explain having money in the bank?

Disposable Monthly Income (DMI) is a "calculated" value, not an "actual" value. A Chapter 13 plan would never work if the DMI changed every day, week, month, year. It would be too burdensome on the system.

So calculating the current monthly income (CMI) and DMI is part of the Means Test. Combined with Schedule I and J, you can get a sense of your disposable monthly income (DMI) after taking into considerations all allowable deductions (for taxes, insurance, etc) and expenses.

Anything that you "save" out of your "allowance" is not disposable income, by definition.

[olivies]

Cigatettes are actually allowed in my district. The judge ruled in favor multiple times so the trustee has stopped objecting.

The argument was that it is an addiction and it is legal, it is not easy for the debtor to stop just because they can/should. Being an addiction that produces heavy withdraw which can affect the debtors ability to concentrate and work to produce income it can be said it is nesscary for the debtors reorganization.

So, you may be able to argue it. If you can pad other areas instead to make up for it though you are going to have an easier time.

Let me guess...the judge is also a smoker. That's like saying a person with SAD can budget for a vacation to Cancun in their expenses because it's necessary for them have the sunshine to stay happy and to produce income. I think there needs to be some leniency in allowing expenses, but geez...

[spmtf]

So once your plan is confirmed nothing changes. Suppose I get a promotion or a big raise over the course of the 5 years. Does the DMI change then, or do they not look at your case once it is confirmed?

[justbroke]

So once your plan is confirmed nothing changes. Suppose I get a promotion or a big raise over the course of the 5 years. Does the DMI change then, or do they not look at your case once it is confirmed?

The Majority of Trustee don't car if anything changes. However, many of those same Trustees require income tax returns to be submitted for review. I submitted mine, it showed a refund, and the Trustee didn't ask for it. The income tax return review will show "major" changes in income or increases in refunds.

Generally speaking, even those Trustees that require income tax returns, not all require all of any income tax refund. Some will only want part of the refund. If your income does increase significantly, and you're not already contributing a good percentage to the unsecured creditors, the Trustee may move for a modification of your payments. One Trustee released a report indicating that less than 5% of cases are ever modified over the life of the Plan. (Don't ask me, but it seems that being in a 70% plan or better, gets less scrutiny.)

So, whether they look at your case or not is District and Trustee specific. Trustees are generally happy when you are making payments on time and staying in plan.

[overspent]

What about birthdays' celerations for kids and pre-paid funeral expenses for old parents ? Are they allowed on schedule J?

[justbroke]

What about birthdays' celerations for kids and pre-paid funeral expenses for old parents ? Are they allowed on schedule J?

You could include some "gift" money or a reasonable amount on Schedule J. However, the more you put, the more scrutiny some Trustees will come down on. As for pre-paid funeral expenses, this will probably be looked at with some scrutiny as well. Generally speaking, you are allowed to provide care for aging parents within reason. Whether your specific Trustee will give you trouble, is too subjective to answer.

The worse is that you may need to downwardly adjust those numbers, but don't be afraid to put something on Schedule J. Don't get too crazy. I don't think more than $50/month for "gifts" is going to be allowed ($600/year) and probably likewise for pre-paid funeral expenses.