Presumed abuse letter

[rjmwx81]

That $300.
Is that using actually expenses, or what you are allowed to use for expenses.

That's using the IRS allowed expenses only. My understanding is, in determining eligibility for Chapter 7, that's all the trustee can consider, right? For example, the IRS totals don't allow for things like entertainment expenses or car repair, whereas in a Chapter 13 those can at least be considered when establishing the payment plan. Correct?

[ccsjoe]

Stop a second. Schedule J is made using actual expenses, not IRS guidelines. Those are ONLY for means test and as benchmarks as to whether you're claiming too much on an expense on J. In Schedule J you actually can put down a 100 or 150 recreational spending budget.

[rjmwx81]

Right, I get that. But my concern is actually qualifying for a Ch. 7 based on schedule J. I pass the means test by default because I'm under the median. But, from what I gathered from Justbroke's post and from further reading, the trustee is still going to look at schedule J and say, "oh, you're claiming $100 in entertainment expenses, that's not one of the 'necessary expenses' according to the IRS" and then dismiss. My true expenses would have my disposable income around or $150, but if I can only count the IRS expenses (food, rent, electricity, car payment, taxes, and insurance) then my disposable income would, obviously, be higher.

[ccsjoe]

We included ALL our discretionary as well as necessary expenses, including a "modest" recreation budget. I honestly doubt a trustee would expect you to live in total austerity with no means of entertainment or recreation, it does not seem realistic. Actually, on Schedule J line 9 calls for recreation, otherwise there would not be a line item for this. I am not reading jb's post right now, but I think you may be taking it to an unnecessary extreme.

[rjmwx81]

Ok that makes me feel better then. I was thinking that, even if you passed the means test by being under the median, the only "allowable" expenses for figuring DMI were the IRS ones.

[Freddy03]

Rjmwx81 - here take a look at my expenses. These expenses go on schedule J.
This should give you an idea -

Expenses:
Gas (cars)- Montly $150.00
Food/Cleaning/Personal - Montly $1,200.00
Clothing - Monthly $140.00
Medical - Monthly $100.00
Utilities - Monthly (Electric/Water) $335.00
Cable/internet - Monthly $120.00
Phone (3 cell phones only)- Monthly $120.00
Home - Tax/Ins $216.00
HOA $25.00
Mortgage $1,650.00
HELC - Mortgage $230.00
Car $385.00
Misc - Car/Home Repairs $150.00
Tolls/Parking $130.00
Auto Ins $145.00
Entertainment $100.00
Misc - Pet Care $50.00
School Lunches/supplies $150.00

Total: $5,396.00