Actual expenses lower than 'national standards'

[katztoo]

How was he able to do this? Did it just go unquestioned?

Yes. He just used the maximums for our family size in all these areas. We only buy clothes when we need them, fix the house when necessary, use sales and coupons on food ect. We don't spend near the limits but were allowed these amounts. This gives us about $500 left each month after bills and the (high) payment t0 the trustee.

[spidge]

Please excuse me in that I did not read all the responses here.

I do not know how big a hurry you are in to file, but if you could is there a chance that you could reduce your income in the next six months? Could you increase your expenses to represent the national or regional averages?

I ask this because we reset the six month look back clock three times before finally telling the attorney to go. We to lived well below the national average on many items and I was determined not to live piss poor. We are now in the second year of our 13 and live more comfortably than we have in many years. Not great but good.

Please before filing consider where you are and where you want to be, and also how you want to get there. Only you know the best way even though your attorney thinks they do.

[berkeleygl]

Listen to catleg! We are also just hovering on the median line, but had to file a chapter 13 because of our tax debt. Our schedule J basically just used the IRS allowances except where major things in our life dictated otherwise (we have a special needs son whose medical care costs way more than "allowed"...the trustee never questioned this). So long as you are reasonable they won't question it. Trust me, nobody has the time to go combing through your financial records to "prove" that you spend $87/month on clothing averaged over a year! Give it your best guess, err towards the national standards, and you will be fine. We just got confirmed today -woot!

[LadyInTheRed]

How was he able to do this? Did it just go unquestioned?

Before filing BK, you are struggling to keep up on debt payments, so you spend less on living expenses than you otherwise would. You buy cheap food that may be less healthy, filling up on white rice and white bread for example, instead of whole grains and fruit and vegetables. You delay buying clothes and put off needed home repairs so that you can make those monthly credit card paymens. You are not exptected to keep that up during your Chap 13. Schedule J is forward looking and can include reasonable expenses that may exceed what you are spending before filing.

[Pizza]

Buy the car and get health insurance, should get you into a 7. 401K payments come out too. You CAN make this work!!!!
Go see someone in person - 3 minimum. You'll feel MUCH better!

Working on it

I like to look at things worst case and dispel everything backwards.

[Pizza]

Our lawyer upped our expenses with food, clothing (don't buy it much), gas, education (kids school supplies) and home maintenance. He used the highest figure allowable so it gave us some wiggle room since we don't spend as much money monthly on these categories.

How was he able to do this? Did it just go unquestioned?

[keepsmiling]

Buy the car and get health insurance, should get you into a 7. 401K payments come out too. You CAN make this work!!!!
Go see someone in person - 3 minimum. You'll feel MUCH better!

[katztoo]

Our lawyer upped our expenses with food, clothing (don't buy it much), gas, education (kids school supplies) and home maintenance. He used the highest figure allowable so it gave us some wiggle room since we don't spend as much money monthly on these categories.

[ValleYum]

Pizza, it's $60 per person on the means test unless you prove more. We could prove a lot with glasses, dental, copays, prescriptions, etc. This is all above and beyond medical insurance premiums.

[catleg]

If your income is $350/year over the median you should get a term life insurance policy to spend enough to get you under the median. You could also decrease your deductibles for car insurance, get some disability insurance, buy a car on credit etc.
And yes take the national standard deductions, that is like a "safe harbor" amount below which you shouldn't have to provide receipts.

[Pizza]

You might want to read up on elective arbitration so you can stall everyone for a while.

Will do.

Taxes need to show up somewhere in your list.

Income taxes are directly deducted from paychecks. Since the trustee would take the refund each year, there doesn't seem to be any point having less deducted, so we should probably start taking the most exemptions on the payroll forms. Home taxes are part of the mortgage. The inspection and registration stickers should be accounted for.

Can your wife do a 401K?

Yes. Mandatory retirement plan.

And am I correct that YOU don't have health insurance?

Yes. That needs to happen. I thought of that already. I'll need to do my own plan because for some reason it's more expensive to have combined plans at work.

How long have you owned your car? What is the current value? What kind of cars do you have? Does the term "cramdown" mean anything to you?

A junker. Probably need to get rid of it before the transmission fails. '97 sedan, 130k miles, some damage, some mechanical 'quirks' that we fix as we go.

Have you ever spoken to any attorneys?
Yes I am full of Q's lol. You need to read up here every day and get edumacated I saw that you thought all debts had to be paid back in full. So I can tell you haven't been doing your homework! (said in the most loving way and wagging finger)

Only on the internet. We need to make a consultation. We aren't in a 'mad rush' per se, but things probably will not improve.

I knew that you don't have to repay all debts in a 13 if you can't afford them, but the repayment can be up to 100%. All it takes is a nice raise or another job and it can be brought up to 100%. That I have read many different places. The hope is that with $60,000, a good attorney could figure out a way to bring it to a 7, since it's right on the edge of median. Expenses seem awfully low for that though.

[Pizza]

Those are all very good ideas. Thank you very much for the input. Some I hadn't thought of - like the insurance premium rising due to bankruptcy. How do you arrive at a number for that (for the schedule)? Are you allowed to guess, since the premium could go up on its own? Are you allowed to raise any of your expenses later?

I've been pondering the medical too - Even though $60 is accurate, it seems awfully low since that's only $720 a year. Our deductible is more than that. A trip to the hospital and it's $1500 or whatever the out-of-pocket maximum is (might be $3500, I need to look).

Home repairs - thank you for the link. Home repairs is one of the main contributing reasons to why we've been going broke. I don't know how much the trustee will allow. There should be a number based on the age of your house, just like there is with cars. A cheap electrician priced in rewiring our house at between $10,000 and $20,000. Ouch. Just adding some circuits to bring the wiring up to code came to $4,000. Roofs don't last forever and one of mine is flat. And what if we got water damage or termites? There's a lot to factor in. The water heater is actually one of the cheaper replacements we need.

[NJLawyer]

You might want to read up on elective arbitration so you can stall everyone for a while.
Taxes need to show up somewhere in your list.
Can your wife do a 401K?
And am I correct that YOU don't have health insurance?
How long have you owned your car? What is the current value? What kind of cars do you have? Does the term "cramdown" mean anything to you?
Have you ever spoken to any attorneys?
Yes I am full of Q's lol. You need to read up here every day and get edumacated I saw that you thought all debts had to be paid back in full. So I can tell you haven't been doing your homework! (said in the most loving way and wagging finger)

[ValleYum]

Some random thoughts for you:

We have seasonal swings in our gas and electric, too, so I took the total expense of the past year for each and averaged it for my Schedule J. Or you can put yourself on 'levelized billing' with the utility company(ies).

Your insurance may go up due to a bankruptcy (and if you get a new car it will change too) - perhaps bump up your insurance cost from $1400/yr.$116/mo. Insurance deductibles (house and car)? Did you lower them? Remember, there are no credit cards to fall back on - so the lower the deductible is the better it will be for you.

Term life insurance? Disability insurance (AFLAC lol)?

Medical - you are allowed $60 per person on the means test for medical (above and beyond your insurance premium) - so most people are usually around that amount on their Schedule J. I am sure you buy neosporin, tylenol, theraflu, etc. Make sure you look through your checkbook and don't short yourself on co-pays, prescriptions, etc.

Same with dental - we have a deductible and it only covers 80% - you should budget for regular dental work.

Home Maintenance - You said your home was older so you need to budget well for home maintenance (if you wind up in a 13).

Here is a GREAT article about home maintenance costs and how to budget for them. http://www.mint.com/blog/goals/home-repair-02022011/ I also knew we needed a new hot water heater and dishwasher in the near future and got prices/estimates for that as documentation for my Schedule J amounts - I just factored the cost in with a little attributed to the replacement items each month along with the regular maintenance amounts that I computed based on that mint.com article.

I may think of more later. Not trying to be bossy - just trying to help. LOL!

[Pizza]

Does that payment include your taxes?
You are lucky to be in a debtor-friendly state.
Have you spoken to any attorneys lately? Are you being sued? What's your story? The more info you share, the more help we can give.
You haven't posted in quite a while, but I do hope you've been reading here. So much good info. No reason to get stuck for 5 years if you don't have to.

Sure.

Right before the statute of limitations was about to expire on all my credit card debt, I got sued twice; both times by Asset Acceptance, LLC (CA). I received a notice to attend Pre-Trial Mediation. The small claims court had 4 or 5 attorneys representing all of the collection agencies. They basically just walk back and forth to the bench collecting judgments. For a $50 fee per party, the court allowed negotiations, but in reality the lawyers demand all the money and never negotiate. They are just hoping that the $50 fee will keep most defendants from even showing up. An actual trial date has not been set yet.

Anyway, I lost my job in 2008 and haven't found anything remotely comparable since. My wife, however, has managed to climb up nicely; although the debts from the hard times still remain and all of mine are in collections already.

Credit card debt: ~$60,000
Mortgage balance: $79,000
Car Balance: ~$14,000

Income $60,000/annual
Mortgage payment $680
Car Payment $311
Student Loans $300
Child Care $400
Medical Insurance (her & child) $300
Electricity $80-$300 (seasonal)
Gas (for heat) $30-$250 (seasonal)
H20 $85
Cell Phone Plans $100
Internet $25
Auto Insurance $700/semiannual
Gasoline $250-$400 (depending on price)

and then other expenses that fluctuate.
national standard for family of 3 $1227

Health out of pocket max $1500 w/$750 deductible.
Dental insurance for family $300/semiannual.

Like I said, the expenses don't seem very high relative to income, so it seems very likely that we would be forced into 13 without some VERY creative expenses.