Actual expenses lower than 'national standards'

[Pizza]

Forgive me if I'm asking something that's already been answered. I have been searching for days and haven't found an answer to this...

In determining the allowable expenses the trustee will let you have before making payments on a Ch.13, are you allowed to use the national standards for your family size even if your actual expenses are lower?

Some of the allowable expenses seem considerably higher than what our family actually spends. Particularly with the 'housing and utility' expenses; it's $1831 a month for our family size in our area. There is no way with a $680 mortgage and a $80-$300 electric bill that we would ever touch that amount, even with the water bill, internet service, and cell phones.

It seems like a trustee would see amounts like this and think we have disposable income coming out of our ears. Our income is over the median by $350/yr (bummer) and the expenses @ national standards are almost what goes into our checking account already. Could we be forced to up the Ch.13 payments to reflect what we normally spend?

[HHM]

If actual expenses are lower, especially in categories that have easy paper trails (mortgage, utilities, car payment etc), you, as the debtor get screwed. Your budget will be partially determined by your "actual" expenses. Sorry.

[keepsmiling]

Try to maximize your other areas- for example, buy a car or two, change your insurance deductibles, etc. Better the money should go to something you need or can use than someone else's pockets.

But I sure would like to know how you get an $80 electric bill. I have a tiny house and mine is never under 100.

[ValleYum]

Don't forget home maintenance falls under this category as well.

I agree with KS about lowering insurance deductibles and purchasing a car.

[magic13]

If actual expenses are lower, especially in categories that have easy paper trails (mortgage, utilities, car payment etc), you, as the debtor get screwed. Your budget will be partially determined by your "actual" expenses. Sorry.

But does the trustee actually ask you to verify these costs or do their staffs verify. In other words do they ask for your utility bills, phone bills if they are reasonable etc. Everyone I asked stated they were never asked to show them. One person said he was asked to show his gasoline usage so he started picking up reciepts at gas stations

[ValleYum]

But does the trustee actually ask you to verify these costs or do their staffs verify. In other words do they ask for your utility bills, phone bills if they are reasonable etc. Everyone I asked stated they were never asked to show them. One person said he was asked to show his gasoline usage so he started picking up reciepts at gas stations

Most people pay these through their checking account - I would think it would be super easy to verify, even without receipts (since we have to provide the trustee with statements)

[keepsmiling]

But does the trustee actually ask you to verify these costs or do their staffs verify. In other words do they ask for your utility bills, phone bills if they are reasonable etc. Everyone I asked stated they were never asked to show them. One person said he was asked to show his gasoline usage so he started picking up reciepts at gas stations

What does your attorney say about local practice?
At any rate, better to CYA. How old are your cars?

[keepsmiling]

Could be it's time to start leaving some lights on

[magic13]

But if you are filing in the summer/ fall , your utility costs are less than the costs in the winter, your checking account will not show that. Our attorney said that the only things needed are the last 60 days income , your last 2 years Federal Tax Returns and of course your ss card , driver license and proof of your plan payments

[Pizza]

If actual expenses are lower, especially in categories that have easy paper trails (mortgage, utilities, car payment etc), you, as the debtor get screwed. Your budget will be partially determined by your "actual" expenses. Sorry.

I was afraid of that. Oh well.

How does the trustee deal with fluctuating expenses, such as electricity and water? Do you take all of your bills for a year and average them out to get an exact number?

How about the food and clothing expenses? Do they want receipts?

Are you allowed to add more to your budget than you would spend while you were living like a pauper before filing? Like going without health insurance or buying cheap food and second hand clothes?

[Pizza]

Don't forget home maintenance falls under this category as well.

I agree with KS about lowering insurance deductibles and purchasing a car.

Hmm. Well in reality there's always SOMETHING that could fail when you own a home - the water heater, the electrical, the a/c... Can I factor in any of those things? Most of them are very old. The water heater is almost as old as I am.

[HHM]

But does the trustee actually ask you to verify these costs or do their staffs verify. In other words do they ask for your utility bills, phone bills if they are reasonable etc. Everyone I asked stated they were never asked to show them. One person said he was asked to show his gasoline usage so he started picking up reciepts at gas stations

Verification is not really the issue, Schedule J is the Schedule of Current (actual) Expenses and is a sworn document. The main problem with the OP's situation is the low mortgage. If your mortgage payment is only $680 per month, you cannot list a higher amount.

[Pizza]

That's fine. If we can afford to repay our debts then we should. I'll look at the schedules closely to see how it all works.

[Pizza]

This is where it seems to get tricky:

Arbitrary Expenses
(1) National Standards for food, clothing and services, housekeeping supplies, personal care products and miscellaneous items based upon the size of your household and your CMI.
(2) Local Standards for housing and utilities based upon family size and county of residence.
(3) Local Standards for transportation expenses, based on the region of the country where you reside, for Ownership Costs and Operating Costs/Public Transportation Costs
(4) Other Necessary Expenses (these are actual expenses) for, among other things, child care, court-ordered payments such as alimony and support, necessary medical and dental expenses, income taxes (including withholding), involuntary deductions from wages (union dues, uniforms, etc.) term life insurance, and a few others.

Actual Expenses
(Your bankruptcy lawyer will explain added stipulations regarding these actual expenses.)

Health insurance
Average monthly payment on secured debts (mortgage, car loan, etc.)
Child Support
Public or Private school expenses for children under 18 up to $1500/yr
Charitable and religious contributions
Expenses to protect debtor and family from domestic violence
Payments required to catch up on past due payments on secured debts
Costs for continued care of the elderly, ill or disabled family members
Chapter 13 administrative expenses

Okay, so we use ACTUAL numbers for mortgage payments and STANDARDS for housing related expenses (such as maintenance, electricity and water)? If so, where can I find those standards?

[keepsmiling]

This is where it seems to get tricky:



Okay, so we use ACTUAL numbers for mortgage payments and STANDARDS for housing related expenses (such as maintenance, electricity and water)? If so, where can I find those standards?

http://www.justice.gov/ust/eo/bapcpa...esting.htm---- I think it's all pretty much lumped together

But if you are filing in the summer/ fall , your utility costs are less than the costs in the winter, your checking account will not show that. Our attorney said that the only things needed are the last 60 days income , your last 2 years Federal Tax Returns and of course your ss card , driver license and proof of your plan payments

Probably not true in TX, where the a/c is likely to cost more than the heat, and the water bill could be much higher as well