Private School Tuition

[ben1381]

I have sent my children to private schools,yeshivas since they were born. I don't think you will find any private school in this country that charges only $125 / month per child- the minimum allowed under Bankruptcy reform for such expenses in the means test. I did some research on the Internet on this subject and found several cases where the bankruptcy court DID NOT allow private school expense. Does anyone have any experience in this area as I decide whether to try and file chapter 7 or will be forced into chapter 13?

[biotechsolution]

your best bet is to try for a chapter 7 discharge. You most likely won't be
able to use school tuition has an expense, only the IRS standard amount.
If you are below the income requirement that it won't matter because you won't have to fill out forms 22A and B. You will just schedule I and J and then you put your actual expenses. Put your full school expenses and just make sure they add up to 0.
If you file a 13 you won't be allowed to spend anymore than the IRS allowed
expense for education.

[laurannm]

It really depends on standard practices in your district. An experienced attorney can best answer on what is accepted and what isn't in your area.

The means test form states that you can claim up to $137.50 per child for private elementary and secondary schools. Anything claimed above that and you'll have to be prepared to justify the additional cost (which unless your kids have special needs that the public school system cannot meet, may be difficult to do).

We just filed Ch 7 and are claiming the $137.50 expense on our means test (actual tuition costs though are $345\month). Our attorney has used this expense in the past and has not had any problems, as long as you have documentation that shows the actual expenditures.

[Help!]

I've seen those cases, too. We are above-median filers and have a huge private school expense (~$1000/mo.). When the UST became involved in our case and steered our means test toward presumed abuse, we were asked to provide documentation for the expense and a statement as to why private school tuition was "reasonable and necessary". It was not brought up for discussion at our initial 341 hearing or at the continued 341 hearing. There were bigger fish to fry in our case.

It is in your favor that this has been an ongoing expense with a long history. There are lawyers who will tell you not to worry, it's just fine... but the truth is that private school tuition lies in one of those means test grey areas.

Filing Ch. 7 with a high income and expenses like these that can be questioned is no picnic. If we actually get through this with a discharge (ours is due and we're holding our breath), it definitely will have been worth the effort and turmoil. We felt we had nothing to lose and if there was any chance for success it was worth pursuing.

[laurannm]

I've seen those cases, too. We are above-median filers and have a huge private school expense (~$1000/mo.). When the UST became involved in our case and steered our means test toward presumed abuse, we were asked to provide documentation for the expense and a statement as to why private school tuition was "reasonable and necessary". It was not brought up for discussion at our initial 341 hearing or at the continued 341 hearing. There were bigger fish to fry in our case.

It is in your favor that this has been an ongoing expense with a long history. There are lawyers who will tell you not to worry, it's just fine... but the truth is that private school tuition lies in one of those means test grey areas.

Filing Ch. 7 with a high income and expenses like these that can be questioned is no picnic. If we actually get through this with a discharge (ours is due and we're holding our breath), it definitely will have been worth the effort and turmoil. We felt we had nothing to lose and if there was any chance for success it was worth pursuing.

Help.....Sort off track a bit, but on your means test did you actually claim the entire $1000 expense or just the standard $137.50 per child? Still a little confused as to whether or not the $137.50 is the "IRS Standard" the form refers to


Thanks

[danaf]

Plus, and OP - correct me if I'm wrong but aren't these private Jewish schools. So I'd think the long term history combined with the fact that it has been your choice that the children be educated in the religious way would be in your favor because public schools cannot offer the same type of education you want for your children. I may be off but just my 2 cents worth.

[Help!]

We actually sat down, added up what we paid over the six months prior to filing and expressed it as a six month average. It came out to about $700, and that's what we used on the means test.

[Cali]

After reading the posts about private school and filing, I guess I got lucky(since this year our kids weren't in private school). Our expenses were around the same as Help!.

[keepmine]

Here's a Chapter 13 case where a court allowed very large expenditures for a private school.

http://www.bkforum.com/showthread.php?t=12511

[Stilltheone]

Our daughter's tuition is $200 a month or $2000 for the whole year. I don't even think our attorney listed that as an expense. It was never an issue with us.

[ben1381]

Thanks for all the information. The only concern is that keepmine's case was decided at the district court level and I think other courts have ruled differently. Does anyone know if the US Supreme Court or any Federal Court of Appeals has dealt with this issue of private school tuition? It might be the luck of the dice what the local trustee or Bankruptcy judge will rule on this issue.

[Tom_Mi]

Where is the document that outlines miscellaneous things like child education?

All I can find are the IRS grid with about 5 items incl. "housing" and "utilities" on it.

Thanks,
-j

[Phillymanhere]

It is the luck of the draw, like so many things in life. And that's what good attorneys are there for. They can guide you in making the best case for a chapter 7 in your area.

Bk is so numbingly case specific and technical with wide discretion for common sense that I see no way the Supreme Court will get into this. It's too messy and ugly. There has to be wide discretion, I think, even though such discretion leads to charges of inconsistency. (I guess it's better to be fair and reasonable than it is to be "consistent"--at least many people think so.)

But don't despair: a good lawyer will often find a way to reasonably calculate your expenses in a way that best furthers your case. Plus, you may indeed be able to use the religious thing to defend your kids in private school.

[laurannm]

Where is the document that outlines miscellaneous things like child education?

All I can find are the IRS grid with about 5 items incl. "housing" and "utilities" on it.

Thanks,
-j

There really isn't a document that mentions anything about child education, except for a couple of places: The BK code specifically mentions $1500/year as an allowable expense for private school, yet the means test form speficially allows an expense up to $137.50 per child.

Anything above that and it varies from district to district as to what is allowed and what isn't (much like everything else when it comes to BK)