I pre-paid for pre-school...is that going to be a problem?

[Atrix]

In May...before I even thought of filing for Chapter 13...I pre-paid for my sons pre-school for this upcoming school year. The pre-school does require a deposit of $1400 that I paid in Feb. The balance was due July 1 $5500 ( I paid it in full back in May)...or I could have paid by the month but with an interest charge.

My question is...will this be a problem that I paid this in advance????

I did mention it to my attrorney and he said we will deal with it later.

Will the trustee ask for this money back???? That would be so embarrasing!!! And it is money I have to pay this year anyway.

Any thoughts on this would be great.

[SMinGA]

It should not be a problem as an expense, in that you would have been paying it monthly anyhow. Assuming it is a reasonable-for your area-cost on preschool/daycare.

But I see an issue potentially with your budget. If this is a one year only expense (as in your child is 4 now and goes to kindergarden next year) not a problem. But if you'll have future preschool expenses for another year or 2 you may need to adjust your plan/payment when that time comes. You don't have a monthly expense for it now as its paid up for the year - but may need to pay it monthly next year?

[NoTomatoCan]

Similar to what SMinGA says... If you need to incur this expense next year, then by all means include it in your expenses now. I look at this similar to home owners insurance. It is (typically) only paid once a year, but you have to be sure to budget for it so you don't get socked with a surprise $6,900 expense next year that you didn't account for.

If you won't incur this expense again, then it should not have any impact at all.