What about tithes? Will the trustee say no?

[Wantmypeace]

If our income is 6700/mo (net), and we pay 10% tithes on our net, so we pay 670/month in tithes to our church, will the trustee allow that amount for charitable contributions on the means test? (And, yes, we could show cancelled checks for that amount for the six months prior to the bankruptcy.)

[momofthree]

I'm not sure 6 months would be long enough to allow it, they might just think it was good bk planning on your part. We had to show it on our previous years taxes and provide the statements from the church for ours to be allowed. It was one of the first questions my attorney asked when he saw our schedule J was "you have proof of this that goes back a couple of years, right?" It may vary by trustee though....

[debee]

Your budget on the other post only lists $100 for monthly charity. I would stick with the figure that can be supported by your tax return. Since you're over the median, and will probably be even more over by the time March and the new median figures roll around, I think you can expect your budget claims to be scrutinized.

[Wantmypeace]

Hmm...I was thinking that if we let the house go, we could get back to paying 10% like we used to. We've only been paying 100.00 for the last year or so. Before that, we paid as much as 1000/mo, depending on the month.

[debee]

We also stopped all charitable contribution in 2009 & 2010 except for two kids that we've sponsored since 2005 with receipts and tax returns to prove it . The thing is the trustee has seen it all and knows every trick in the book and with your income, he/she will have more motive to object.

[backtoschool]

Tithing expense deductions are a huge red flag for the US trustee for over the median filers. You will have to have a long history of documented tithing at the level you are claiming including but not limited to, income tax returns, canceled checks, receipts from the church, etc.

[UpaCreekinCA]

My attorney said that much like the IRS, the Trustee won't bock at it as long as you can provide documentation and a track record up to 10%. If you started giving $500 or $1000 a month starting 3 months ago, I would think that would raise red flags.

[backtoschool]

My attorney said that much like the IRS, the Trustee won't bock at it as long as you can provide documentation and a track record up to 10%. If you started giving $500 or $1000 a month starting 3 months ago, I would think that would raise red flags.

There has to be a documented long term history of tithing in order to take the expense. Several years has usually been the standard.

[tcreegan]

Hi all,

backtoschool has the gold standard: last two years tax returns

Just a thought here, if you are going to go back to your 10% post-BK, couldn't that be used on Sched J?

Tom in Colo

ps: the ceiling is now 15% for overly generous individuals...

[MSbklawyer]

Congress specifically amended the bk code with a special provision to protect charitable giving / tithing in 2006. It doesn't matter what you've done in the past. For instance, if you "come to Jesus" the day before you file bk, and as part of your new-found faith you tithe, you can count that as an expense as long as you intend, in good faith, to continue doing so. Now, will the trustee examine you with an electron microscope should you decide to start tithing right before bk? Yes. But you are entitled to do it.

[LaurieM]

lol @ "come to Jesus"

[tcreegan]

Hi MSbklawyer,

That is the way I read the BK code! No history mentioned, just that the Church has to be IRS qualified as a charitable organization.

But I have read cases and posts here where the trustee wanted the history of giving, even asked for documents from the Church.

Case of 'do as I do not as I say' ?

Tom in Colo

[artgood]

It is kind of a catch 22. We haven't been 10% tithers 100% of the time because we had too much debt. If the debt were discharged, or we were in a 13 plan and on a budget, we would definitely be strict 10% tithers.

[Wantmypeace]

YEP! That's us. I just pulled up my Quicken account and ran a report on our tithing. I can PROVE 100/mo for the last year. I'll just go with what I can prove...