Assistance with expenses and advice

[callies]

Can someone please look at our expenses and tell me if we are completely off base. We have a meeting scheduled for next Thursday! We rent, own our vehicles that aren't worth much and our income is roughly 6150 in OH before taxes. Family of 4 including two kids.

I'm sure something has been posted in the past, but I'm very nervous. After the consultation takes place, then what? Do they tell you at the meeting what chapter to file? Any insight would be great! Thanks in advance.

MONTHLY EXPENSES
Rent 1040
Renter's Insurance 35
Electricity 113
Gas-Heat 125
Garbage 18
Sewer 22
Water 55
Cell phone 175
Cable 60
Internet 25
Home Maintenance 136
Food 752
Clothing 240
Laundry/Dry cleaning 70
Medical and Dental Expenses 240
Gas 350
Charitable contributions 100
Entertainment, Recreation 250
Life Insurance 38
Auto Insurance 175
Auto Repair/Maintainence/Tax & Registration 113
Personal Grooming 65
Postage 5
Tuition/Books/Supplies 10
Student Loan 77
Household Misc 200
Pet (Food, Medical, Grooming) 50
Driver's Ed 20
Personal Loan 100
Home Appliance 100
Guitar Lessons 40
4799

[topekajack]

I don't think that the trustee is going to allow you to claim a few of your expenses as they are not deemed "necessary." For example, guitar lessons, driver's ed, $250 for entertainment, and perhaps even cable. My attorney (now former) told me no way to our cable, pet grooming and gym membership.

Anyone else able to claim these items? I guess it depends on your district/trustee?

[DebtStinks]

Well for a family of 4 in Ohio the median income is $73,301. You really need to nail down your average income for the last 6 months as your "roughly 6150" comes out to $73,800 which is just over the median. This means you to need to run the means test which is very strict on what you can and can't count for expenses. You can run though the means test yourself with a tool I wrote while working on our case here:

http://www.johnfire.com/meanstest/wizard.php

Some of the IRS numbers are a bit out of date but they are still in the ballpark.

If your income is dropping it might pay to hold off for a bit so you can comfortably get under the median. Otherwise you'll need to take a close look at the means test and be sure you can pass it (attorney will help here).

[momofthree]

cell phone & cable may be considered higher than is reasonable.

Entertainment, I'd think would be a bit excessive and guitar lessons may have to be included into that category as well.

Household misc will probably have to be more specific.

Any reason you're including a personal loan payment and appliance payment in there?

What is your bring home and your unsecured debt?

Do you really spend $136/mo on home maintenance for a home you don't own? That's over 10% of your rent payment....

[keepswimming]

MONTHLY EXPENSES
Mortgage 1200
Electricity 200
Corn-Heat 300
Garbage 30
Water 55
Cell phones (no home phone) 175
Internet 40
Home Maintenance 120
Food 400
Clothing 75
Laundry/Dry cleaning 5
Medical and Dental Expenses 120
Gas 400
Charitable contributions/tithing 400
Entertainment, Recreation 25
Auto Insurance 65
Auto Repair/Maintainence/Tax & Registration 70
School fees 20
Pet Food 10
Household fees/(printing,postage,paper etc) 25
We have 2.5 vehicles with no payments. They get us where we need to go.
3725/month expenses not counting the credit:

We live in the country. Lots of driving. No cable, no home phone, etc. Most clothing is used or purchased on 75% off racks. Church helps with food so that expense varies. Cut our own hair (which i am sick of doing, by the way! lol) The last few sports things for the kids we applied for the thing where you don't have to pay the sign up fee so no fees there. We get movies from the library for free, and sometimes from the redbox one dollar thing.

Husband currently grosses 1730 every two weeks. 1360 take home
Taxable income for 2008 was SIX THOUSAND DOLLARS, after business expenses, etc were figured in. Gross income from 2009 w2 is 38K. This does not take schedule c's into consideration.

65K in unsecured debt. Most of this is from our failing at-home businesses. The bottom has fallen out of how I used to make my money from home (..but we did not incorporate)....I will spare you all those details...

"Regular payments" on CC were 1800/month" Stopped paying all but three of them in May 09. Currently the debt solutions payment is 800/month where 332 of it goes to them.

I have spent the past several months looking for work. Never thought it would take this long. Am now starting to look at going to grad school and/or working in other states. This would require a move, a much needed move! Our needs in this rural area are not being met. Ready for drastic change, but not sure if we should file or keep trying to work this out.

Sorry for the hijack, callies. I just saw your budget and thought I would post mine as well, in case others are in an evaluting mood.


Still have not filed. Am I delirious in thinking we still might find a way out of this on our own?



life is good, even when it sucks

[callies]

Details

I included the person loan because we owe my parents 1000 and are making monthly payments to them. As for the home appliance, it's an account where my husband works. The home maintenance is because we eventually hope to own the home some day. Currently it's in my parents name and we just make the payments, etc.

Currently we owe approximately 55,000

Average take home is 6721

[momofthree]

I'm guessing you mean your bring home is $5721 since you said gross is $6150.

If you fill out the means test, located here: http://www.uscourts.gov/rules/BK_For..._022A_1208.pdf you'll see that some of your expenses (entertainment, misc household expenses, cell phone, etc) are not able to be listed, and you therefore may end up failing the means test and being forced into a chapter 13. Just roughly filling out the info for you (not knowing your county or your medical insurance premiums, etc, I can't do it fully, just tried to base it off of your bring home of $5721 and average of counties expenses), you're coming up with a 60-month discretionary income of over $90k which would most likely push you into a 100% payback chapter 13 plan (assuming that I did it right, which I very well may not have, I'm no expert, lol)

I could definitely be wrong, so you'll want to fill it out yourself to get the actual figure and see where that leads you...

[momofthree]

Oh, and you will need to be very careful not to pay your parents over $600 or the trustee will take it back from them due to it being a preferential insider payment. I believe they look back to the previous 6-12 months.

[HakunaMatata]

I included the person loan because we owe my parents 1000 and are making monthly payments to them. As for the home appliance, it's an account where my husband works. The home maintenance is because we eventually hope to own the home some day. Currently it's in my parents name and we just make the payments, etc.

Currently we owe approximately 55,000

Average take home is 6721

Assuming the personal loan is unsecured (no collateral), your parents are treated the same as an unsecured creditor (ex/ credit card). BK doesn't give us the option of picking and choosing who we want to pay. All debts must be listed (unsecured is not an expense); however, you have the option to repay (if you decide) following discharge. You need to mindful of potential "preferential payments" in scenarios such as this. Understandably, you wish to repay your parents. Unfortunately, paying your parents and not paying your creditors equitably isn't acceptable.

Since you're in Ohio and weather fluctuates greatly, you want to take the utility cost average over the course of a year to arrive at your monthly expense (natural gas is far less expensive during summer months). The trustee is concerned with present costs. Since you currently rent, you shouldn't have significant home maintenance expenses. Appliances, while costly, are one time purchases and aren't regular expenses. Charitable contributions commonly require proper documentation. In some districts, pet expenses aren't permitted.

Assessing expenses can be frustrating. Sometimes expenses we deem important aren't viewed similarly by a trustee. An attorney familiar with local practices is beneficial in this domain.

You can review national and local standards here:

http://www.justice.gov/ust/eo/bapcpa/20091101/meanstesting.htm

[OhioFiler]

"Regular payments" on CC were 1800/month Stopped paying all but three of them in May 09. Currently the debt solutions payment is 800/month where 332 of it goes to them.

This is an amazing example of how the debt "solution" companies solve nothing but their own monetary needs. That's over 40% of the payment!

I'd stop wasting that $800 per month immediately.

[callies]

I think I'm more confused than when I started lol We have an appointment next Thursday! So we will see. Thanks for eveyone's assistance!

[HakunaMatata]

The confusion grants you the opportunity for knowledge. For many, the process is initially overwhelming. Continue to read, continue to post questions...as this will likely be beneficial when interviewing attorneys.

[callies]

I'm back! When the attorney looks at your income does he/she base it on your income tax return and/or pay stubs? My husbands overtime has been reduced since last year.

[OhioFiler]

I'm back! When the attorney looks at your income does he/she base it on your income tax return and/or pay stubs? My husbands overtime has been reduced since last year.

The attorney will do his evaluation based on your current earnings but will also need to complete the Means Test based on your last 6 full months of pay..

[callies]

Typically how far back should I go with bank statements?