Affect of help from family

[jdcat]

I was sitting here thinking about our expenses and the fact that we spend very little on clothing. My MIL has been a huge help in this area for a few years now and especially lately. This got me to wondering what would happen if a person did not claim a clothing expense on schedule J? If asked about it and the person admitted that family had been helping with that expense would that be a problem at all?

Would the contributions from family somehow count as income in some way? Even if there was never any money changing hands?

I'm not personally loosing sleep over this, I'm just very curious.

[mtbc]

I can see an argument that it would count as income. It doesn't make sense to omit it from Schedule J unless you really don't intend to spend anything on clothes going forward, though.

[jdcat]

Thanks mtbc.

It doesn't make sense to omit it from Schedule J unless you really don't intend to spend anything on clothes going forward, though.

This is something that interests me. First because there have to be people out there that really are that broke and do not spend on certain expenses that are essential because they can't.

We'll be in that position until June when our car is paid off. Our petition will, hopefully, be filed within two weeks and I'm curious to see what our attorney ends up doing with this part of our schedule J. Until June we won't be spending much at all on clothes. Mortgage, utilities, food and car payments come first. After June we'll be ok.

I guess I'm just curious because a family of 5 with no clothing expense seems like it would look odd, but after looking at our schedules it would be obvious that there is no money left over each month for clothing so it's not an exaggeration.

I'm hoping this will help us. I'm hoping the trustee will see that when my car is paid off in June that extra money each month will be needed for essentials.

[blessed]

When I make our family budget I list all of the bills that HAVE to be paid, mortgage, car, utilities. Then I take the rest and divide it up between the other categories in reasonable amounts.

I almost never actually spend that amount on the correct category though. Like one month I'll not spend a penny on clothes, but then I'll go buy 3-4 outfits for my son and blow the budget for 6 months time. I just put an "average" on that line and if I spend it on something else, so be it.

I did the same thing for schedule J and know that it isn't exactly accurate, but I don't HAVE to spend the money the way it's portioned.

[sadbutinneed]

We are in a similar situation with our schedule J and our other expenses. We are meeting with our attorney this evening and I'll repost with what she comes up with on expenses that we are currently not taking care of. We may get a raise before the 341, so I don't know if she'll try to cover this potential amount in case we get it to prove to the trustee that even with the raise we have no DMI?

[blessed]

Oh, and I was in the same situation with grandparents loving to buy clothes for my kids. They liked doing it, so of course we let them have at it! That doesn't mean that you shouldn't put some money into your budget to buy them if you need to. Whether or not it gets spent it another story.

[mtbc]

I'm hoping this will help us. I'm hoping the trustee will see that when my car is paid off in June that extra money each month will be needed for essentials.

That seems to me to be exactly the sort of point you can mention on line 19.

[SMinGA]

jdcat, I'd suggest put your July & later expenses on schedule J and the car payment. If you are questioned about the negative bottom line, explain that family is helping with clothing and such for now until the car is paid off in a few months. Better that, than to end up in a ch. 13 because it looks like your disposable income will go up in 3 months.

My inlaws help here & there also. I know they do it because they don't mind, but also because they know things are tight with us right now. So when the kids come home (spend about 2 Saturday nights a month with my inlaws, who live 5 minutes away) and my son has new shoes, or someone has gotten a haircut, or my mother in law brings home 'snacks' from the grocery store - I don't mind and I TRY not to feel bad...

[jdcat]

SMinGA

jdcat, I'd suggest put your July & later expenses on schedule J and the car payment.

Can you do that? I know schedule J is current expenses with a slant toward the future but I've been assuming that we can't do that.

We're in a tight spot because we want to reaffirm our home so we have to come out with at least a few dollars of DMI on schedule J. We can't be negative. But I've been wondering if we were to go ahead and fill out schedule J with the expenses we actually need and come out negative perhaps then if there is a hearing on the reaff we can explain that our car will be paid off in June so we'll only be negative for a few months.

[jdcat]

When I make our family budget I list all of the bills that HAVE to be paid, mortgage, car, utilities. Then I take the rest and divide it up between the other categories in reasonable amounts.

I almost never actually spend that amount on the correct category though. Like one month I'll not spend a penny on clothes, but then I'll go buy 3-4 outfits for my son and blow the budget for 6 months time. I just put an "average" on that line and if I spend it on something else, so be it.

I did the same thing for schedule J and know that it isn't exactly accurate, but I don't HAVE to spend the money the way it's portioned.

I budget also, have been for months now. All of our medical and clothing is coming out of our food budget because there isn't anything left to set aside for those things. If we absolutely need something it gets bought, and we have soup or something else super cheap for dinner to offset the cost.

I'd like to change our federal withholding to give us more net income each month but I'm afraid to mess with it. In the contract we signed with our attorney there was a mention of us having to turn over next years tax refund to the trustee. So I'm afraid us changing our withholding would tee off the trustee.

[jdcat]

We are in a similar situation with our schedule J and our other expenses. We are meeting with our attorney this evening and I'll repost with what she comes up with on expenses that we are currently not taking care of. We may get a raise before the 341, so I don't know if she'll try to cover this potential amount in case we get it to prove to the trustee that even with the raise we have no DMI?

Yes, that would be great if you'd post and let us know what your attorney says. I'm very curious. Thanks!

[jdcat]

SMinGA

My inlaws help here & there also. I know they do it because they don't mind, but also because they know things are tight with us right now. So when the kids come home (spend about 2 Saturday nights a month with my inlaws, who live 5 minutes away) and my son has new shoes, or someone has gotten a haircut, or my mother in law brings home 'snacks' from the grocery store - I don't mind and I TRY not to feel bad...

We are very fortunate in that my MIL loves shopping for our kids. She doesn't buy expensive stuff but she does buy them a lot. She has always been very involved in our kids' lives and spends time with our kids each and every weekend. She does haircuts and shoes for them also. If it weren't for her we'd be in trouble.

She doesn't know about our pending bk, but she knows with me out of work right now things are tuff. She drives me crazy sometimes but I so appreciate her and all she does.

[jdcat]

That seems to me to be exactly the sort of point you can mention on line 19.

I'm going nuts waiting for our attorney to call us and tell us it's time to come in and review the petition with him. I'll bring this all up with him and ask about any comments we could put on line 19. Thank you.

[sadbutinneed]

Ok, so our attorney tonight had the schedule J completed for us, based on some basic budget numbers we gave her, and did not bat an eye at "help from relatives if that help was them buying clothes, etc on their own for our kids". She is suggesting to reaffirm the first mortgage and two cars. Our first mortgage has some equity so she thinks it best to reaffirm so that we can get the benefit of reporting timely payments.

Our schedule J shows a positive monthly amount of about $50. even with the possibility of a raise in April, she believes this is the best course of action for the trustees in our area, that if we are too far negative they won't allow any reaffirmations and we could lose the cars (which she says won't really allow ride through).

I am hoping that as comfortable as we feel with her means that she's just really good and really been there, because she makes our situation sound really simple even though to me there seems to be so many moving parts!

we're filing tomorrow, the anxiety for the 341 begins!

[SMinGA]

For almost anyone filing bk, their actual budget 'pre-bk' is different from their actual budget 'post-pk'. Before, you're either paying credit cards or scrimping to save up an atty fee to file. You avoid buying new clothes, even if you need them. You might live off of cheap meals, because buying inexpensive but well-balanced meals is hard to afford. You can't do that forever though.

Our atty advised to put realistic #s, and to look at annual needs and give an average. For example, when we put very little in vehicle expenses other than gas (and insurance, but that has its own area on the forms) he asked about ad valorem tax/tag fees and took our response and divided by 12. We didn't list clothing expenses - he asked for an annual approximate and divided by 12...