expenses and debt

[Michellemg]

Hi, I am confused regarding the expenses. I am supposed to be paying my mother 800.00 per month in rent but I cannot show that I am paying that because my credit card minimums are about 1000. per month. How can I truly show my expenses when my debt takes up most of my money?

[scorpion35]

Hi, I am confused regarding the expenses. I am supposed to be paying my mother 800.00 per month in rent but I cannot show that I am paying that because my credit card minimums are about 1000. per month. How can I truly show my expenses when my debt takes up most of my money?

paying $800/month to your mom?
u better have documents to back that up or the trustee is not going to like it
what is your income?

[Michellemg]

I know lots of people that are living at home and paying rent to their families. I can't afford my own place after my debt and divorce.

[scorpion35]

I know lots of people that are living at home and paying rent to their families. I can't afford my own place after my debt and divorce.

true! but do u have anything to prove that you're paying rent and not just giving your mother $800 every month to hide it from the trustee?
if not it will be considered fraud and the trustee can go after your mom to recoup that money

[Michellemg]

What would count as proof? When able, I write her checks for that amount but my credit card minimums are so much that I can't always do that. I pay half her mortgage and we are the only two living in the house.

[scorpion35]

What would count as proof? When able, I write her checks for that amount but my credit card minimums are so much that I can't always do that. I pay half her mortgage and we are the only two living in the house.

i am not sure what would count as proof
i am sure people with more experience will be able to answer

[dumpinmydebt]

You will really need to ask your lawyer this one.

Don't take this personally.

[tcreegan]

Hi Michellemg,

How can I truly show my expenses when my debt takes up most of my money? ...stop paying on your debt.....

Seriously, if you are going to file BK, paying on debt that will be discharged is throwing $$ away!

Your expenses are going to be done in two different ways, the means-test and schedule J

The means test looks at your expenses/income going into the BK. On the means test you will have IRS standards to use/compare your expenses. It is pretty regimented and not a lot of detail needed. There are online versions of the means test, you can play around with them to see what the means test is like.

Schedule J is your expenses coming out the other side of the BK. This is more detailed, like a budget. You use either actual expenses or expected expenses....ie; what you would be spending if you weren't broke and crushed by debt payments. Go here and download a copy of schedule J and see what it is like: http://www.uscourts.gov/FormsAndFees...ptcyForms.aspx

Paying your Mom raises a red flag for the BK trustee, they look for what is called an 'insider payment' This is where people move $$ or assets to family or friends to keep them out of the BK. Obviously not the case for your situation, but you are going to need some documentation to show the trustee. My best suggestion would be to write up a legally binding contract between you and Mom and have it notarized.

Good luck with this, and keep posting, we will try to help you as much as we can!

Tom in Colo