Underestimate Expenses?

[dabusted]

This is something of a follow-up to my first post which is just below this one on the forum.

We are filing a 7 and our expenses (without debt repayment) exceed our income by $300-$500 per month. We have been able to sustain this situation with the proceeds of student loans my wife has been borrowing and will continue to borrow until her Master's degree is done.

Will Schedule J expenses significantly in excess of Schedule I income raise a huge red flag, even if I note on Schedule J that the excess is paid from new student loan proceeds? I can probably adjust my estimates of Schedule J expenses so it essentially equals Schedule I income.

I am particularly concerned about there being a red flag because the bankruptcy court's web site for my district actually says in its "Guide for Pro Se Filers", that Schedule J should not show expenses in excess of income. I don't won't to invite a bunch of trouble (more on that in the other post) even though I can easily explain where is money for the shortfall comes from.

I appreciate any input and suggestions. NO response will be considered any form of legal or bankruptcy advice.

Thanks again for this great resource! dabusted

[ansky0007]

Our Schedule J was negative $600, I would try to adjust your expenses to get it close to $0, When we tried to reaffirm one of our vehicles the trustee asked how we can afford the payment when we were negative as it was. We had to show that our income slightly increased to be able to cover the car payment. I would try to get it close to zero or no more than negative $100.

[jeb]

Our Schedule J was negative $600, I would try to adjust your expenses to get it close to $0, When we tried to reaffirm one of our vehicles the trustee asked how we can afford the payment when we were negative as it was. We had to show that our income slightly increased to be able to cover the car payment. I would try to get it close to zero or no more than negative $100.

Sort of a "catch 22", isn't it?

If you have too much in the hole, they want to know how you are paying - if you have too much over, they kick you to 13 or totally out. - jb

[jennordhavn]

Mine was -277.32. I did try to adjust my expenses down a little bit so I wouldn't show such a huge negative number. But I didn't want to go too far the other way in case they disallowed some of my expenses (student loans and DDs private school tuition).

I think you may want to adjust it a little closer to zero, but keep it a bit negative in case the Trustee questions some of the expenses. Also, make sure your expenses are reasonable and for certain ones (child care, tuition, high medical costs, etc.) have receipts just in case.

Good luck.

[dabusted]

Mine was -277.32. I did try to adjust my expenses down a little bit so I wouldn't show such a huge negative number. But I didn't want to go too far the other way in case they disallowed some of my expenses (student loans and DDs private school tuition).

I think you may want to adjust it a little closer to zero, but keep it a bit negative in case the Trustee questions some of the expenses. Also, make sure your expenses are reasonable and for certain ones (child care, tuition, high medical costs, etc.) have receipts just in case.

Good luck.

Thanks to all for the replies so far. I really welcome the input and hearing different viewpoints.

Quick question for jennordhaven--you mentioned you were worried the trustee might disallow some of your expenses like student loans. Were these loans for your DD or your own educational loans? My student loans are not dischareable and I am required to pay them, so it would be very difficult for me if the trustee tried to disallow them. Could he?

[jennordhavn]

Thanks to all for the replies so far. I really welcome the input and hearing different viewpoints.

Quick question for jennordhaven--you mentioned you were worried the trustee might disallow some of your expenses like student loans. Were these loans for your DD or your own educational loans? My student loans are not dischareable and I am required to pay them, so it would be very difficult for me if the trustee tried to disallow them. Could he?

I have heard that some Trustees disallow the student loan payments as expenses. These are my student loans from undergrad and law school. I'm not sure how it's handled in this district though. Mine are only $120, but will increase to $480 in October. UGH.

I was afraid the Trustee may disallow my DDs private school tuition also. On the means test I could only claim $137.50, but on Sched. J I put the entire amount (about $400/mo.). It says on the means test you must provide documentation to the Trustee and explain why it's required, but I was never questioned about it.

[deadbroke99]

I am concerned that since my student loans are in deferrment that I won't be able to count them on my expenses. I graduate in December.