Expenses for interview with attorney

[ssmdem]

We are interviewing our final attorney today. In filling out the questionnaire she requested beforehand, here are the expenses she has requested. I'm impressed - none of the other attorneys have asked for this much info at the free interview session. Do these figures look right?? I know medical is high, but that's actually on the low end - I'm diabetic and take six daily medications, husband and son are both on allergy medications, and then $200 for medical insurance and two kids in braces. Family of 4 in Florida. Right now with these expenses, I am coming up with a negative $750. We're about $200-$300 over median at the moment - but really want to file NOW and be done with this. Anything not look right?

ESTIMATED FUTURE MONTHLY LIVING EXPENSES
Rent/Mortgage/Homeowner’s Assoc./Space Rent Payment $1200
Real Estate Taxes $125
Property Insurance $150
Electric $250
Gas $50
Water & Garbage $75
Telephone/Cell Phone $150
Cable $75
Home Maintenance $50
Food & Household $700
Clothing (includes haircuts, personal grooming) $100
Laundry and Dry Cleaning $25
Newspaper, Magazines, Books (including school books) $20
Medical, Dental, Medication $650
Automobile Insurance $155
Other Insurance (including Life insurance) $415
Automobile operating costs (gas, oil, maintenance) $400
Child or Spousal Support $N/A
Day Care $N/A
Charitable Contributions $100
1st Automobile payment $370
2nd Automobile payment $N/A
Other installment payments (including furniture) $N/A
TOTAL MONTHLY EXPENSES $5060

NOTE, what about union dues ($91.54) and 401-K repayments ($282) that are automatically taken out of paycheck?
Additionally, we have 2 pre-paid college plans for $281.61 and $203.63

[SMinGA]

The things that seem high (compared to my own #'s) are items that you probably won't have any trouble with. You've already mentioned your medical - if you can document a higher monthly average then I would suggest NOT rounding down. All the things you mention are reasonable & necessary I believe. Maybe break down the total though, so the atty can see the prescriptions/ongoing orthodontist care/etc.

Home owners insurance - ouch! Downside of living in FL I suppose!

You may be asked to document the charity. I understand it should not be challenged, as long as you can back it up.

The union dues are probably to go in as a deduction on sched. I. Its not exactly optional, as I understand it? As I'd mentioned before, I hear 401k loan repayment is not an allowed expense for 7 - but as long as you have enough negative DMI that it doesn't make a difference, it should not matter. And still not sure on the pre-paid tuition. Guessing that will be disallowed since parents paying college tuition for 18+ offspring doesn't fly.

[ssmdem]

Thanks!! That NOTE at the bottom regarding the other stuff is really in there for my attorney - I just copied and pasted everything from my sheet for her. We're already negative $750 a month without those items, so I really don't think they are an issue. Just wanted to ask her in the event some of the other stuff I put didn't fly.

[justbroke]

NOTE, what about union dues ($91.54) and 401-K repayments ($282) that are automatically taken out of paycheck?

Union dues are mandatory (probably), and should be deducted on Schedule I as part of your income deductions (just like income taxes). The 401(k) loan payments are not an allowable expense in a Chapter 7.

The only number I see a potential issue with is Cable. Everything else is well within reason... I think. Your home mortgage expense seems low though.

[ssmdem]

Union dues are mandatory (probably), and should be deducted on Schedule I as part of your income deductions (just like income taxes). The 401(k) loan payments are not an allowable expense in a Chapter 7.

The only number I see a potential issue with is Cable. Everything else is well within reason... I think. Your home mortgage expense seems low though.

My home mortgage expense is low, but it's all I can document right now. We are surrendering our current home (mortgage of $2800). We have a rental property that we are keeping payments current on. There's a tenant in it at the moment paying $1000 a month, but we're paying the excess ($100 plus the additional escrow amounts) in order to ensure that we at least have a roof over our heads if we are forced out of here. I really do not want to move back into the rental. I would much rather rent something else, and if we do, we're looking at closer to $1500 a month - of course then we wouldn't have property taxes and property insurance, so I guess the numbers really do balance out. We are also going to apply for a modification on our current mortgage in the next few days. If it goes through fairly quickly, that amount is what we would use on schedule J - just can't document it right now.

[ssmdem]

The only number I see a potential issue with is Cable.

We actually have satellite which is much cheaper than cable around here. We have the basic package - but we do have two receiver boxes. By removing the 2nd receiver box, we could knock about $20 off the monthly bill - but I'd rather deduct that $20 from the food budget than listen to my kids fight over one TV.

[justbroke]

We actually have satellite which is much cheaper than cable around here.

The cable/satellite tv issue is District Specific. Your District may allow up to $75 with no questions. Other Districts go from allowing "basic" cable to allowing no cable at all. I would still list it at $75 and see if anyone complains. Just be prepared to reduce the amount.

[ssmdem]

The cable/satellite tv issue is District Specific. Your District may allow up to $75 with no questions. Other Districts go from allowing "basic" cable to allowing no cable at all. I would still list it at $75 and see if anyone complains. Just be prepared to reduce the amount.

I'm really interested in seeing how she feels about all of these amounts. She works part-time as a trustee herself, so hopefully she knows what's going to get by without a second look. Went back and added up all the medical expenses again, and that total actually goes up to $775. Can't believe we actually spend so much money on medical - more than groceries!!!! If I can just get these kids out of braces, that will help immensely, but we've got another year and a half of that!

Gotta run - appt is in an hour. Will report back tonight on what she says.

[justbroke]

I'm at $619/month on just my dental and medical insurance alone. That doesn't include the other allowances. I have no one in braces, but wife just got one crown down and needs 2 more. Insurance only covers 50%.

[ssmdem]

Well, that went fairly well. The only thing she questioned at all was the medical and just documented where each amount went - no issues after then.

However, after looking at our six month average, she thinks November is the earliest we can file without cutting it too close. At that point, she'd prefer to wait until January so we can not have to worry about the $1200 I paid my parents this past December.

I just absolutely don't want to wait anymore. This is driving me insane!! We're not able to try to save any money for fear that the trustee will just take it away anyway. The longer we wait, the further we get into the foreclosure process, and I really want to be able to live here payment free for as long as possible while we're in "saving mode." Right now, yeh, we're stockpiling groceries and other necessities, but I'd feel alot more comfortable having the $$.

[iv65536]

As for your home, what are the mortgage balances and property values?

If you are already in the process of foreclosure, one thing working in your favor is the fact that the courts in Florida are swamped with foreclosure cases. I was rooting around in some of the public court records and found some cases that had been going on for a couple years if a bankruptcy is involved. I am also seeing similar delays in Wisconsin as well. There was also a case in Ohio where one person held off a large bank and the bank's outside law firm for 11 years - pro se most of that time.

[ssmdem]

As for your home, what are the mortgage balances and property values?

If you are already in the process of foreclosure, one thing working in your favor is the fact that the courts in Florida are swamped with foreclosure cases. I was rooting around in some of the public court records and found some cases that had been going on for a couple years if a bankruptcy is involved. I am also seeing similar delays in Wisconsin as well. There was also a case in Ohio where one person held off a large bank and the bank's outside law firm for 11 years - pro se most of that time.

We owe $345K, and it's worth about $285K. We are in Florida, but not central or south Florida which is where most of the cases that drag out are from. Realistically, we know we have about a year at best. We're already in our 3rd month - have been mailed the Notice of Intent. The attorney today said the mediation will be in the 6th month (which is October), and to be ready to go by at least January - but probably can expect the auction to be held in February or March. She said about a year of missed payments is what people are getting right now.

[dmu]

Congrats ssmdem! Looks like you're well on your way.

I too have a question regarding expenses. To what extent do your expenses have to be documented? Will the trustee simply take my word for it or do I have to be prepared to show support for every number that's not coming from the federal table?

Additionally, I pay my mother for child care services. Is this considered a preferential payment? Or do preferential payments only only relate to repayment of loans and not payment for services rendered?

[ssmdem]

Congrats ssmdem! Looks like you're well on your way.

I too have a question regarding expenses. To what extent do your expenses have to be documented? Will the trustee simply take my word for it or do I have to be prepared to show support for every number that's not coming from the federal table?

Additionally, I pay my mother for child care services. Is this considered a preferential payment? Or do preferential payments only only relate to repayment of loans and not payment for services rendered?

I think anything that is over the federal numbers, you need to have backup for. The only thing she questioned was my medical. I told her it was insurance, orthodontic payments, and medication. She just said that's fine, just save receipts. Everything else she wasn't concerned about.

As far as you paying your mom for child care services - I don't know. I would guess a trustee could have an issue with this. Does she keep other children too, or just yours? I'd check with an attorney on that one to be sure.

[lrprn]

To what extent do your expenses have to be documented? Will the trustee simply take my word for it or do I have to be prepared to show support for every number that's not coming from the federal table?

It depends on how close you are to the trustee's acceptable values for everything. That can vary a lot from trustee to trustee. If you are filing with a lawyer, he/she should be familiar with what your trustee will accept and what will raise red flags.

Additionally, I pay my mother for child care services. Is this considered a preferential payment? Or do preferential payments only only relate to repayment of loans and not payment for services rendered?

Preferential payments are payments of over $600 total within 90 days of filing to a single unsecured creditor but not to other creditors. Paying your mom for child care is a service, not a loan. As long as what you pay your mom is close to the average rates for child care in your local area, you'll be fine.