(Another??) Schedule I - J Question

[brokeincmch]

Hello-

Thanks again for the helpful forum.

A little background: I am (will be) a below-median Chapter 7 filer in NJ with a 3-member household. Will be filling jointly with spouse. Looking to file on May 1st or June 1st if possible. That depends on whether or not my creditors sue.

I was hoping that the folks on this board could look at my self-prepared Schedule I - J to see if it is copasetic. My lawyer insists that since I am below median that I have nothing to worry about (according to him the trustee(s) is/are only really interested in above-median Chapter 7 filers). He also insists that since I am well below the median with a toddler at home that Schedule I-J should be no issue whatsoever. I trust him, but I still want to do my homework and make sure that I am "setting myself up for success."

Here are my numbers:

Monthly income net of tax: 4,310

Allowances (per IRS Standards)

Food, Clothing, Household Supplies, Personal Care: 1,152
Health care - co-pays, OTC medications, bills: 180
Utilities, house maintenance: 650
Rent: 1,049
Vehicle operating - gas, insurance, repairs, etc: 598
Car owner (actual lease pymt): 458

Total allowances per IRS standards: 4,087

Allowed expenses (Actual)

Childcare / Daycare: 340
Life Insurance: 30

Total allowed expenses: 370

Total allowances & expenses: 4,457

Monthly DI: (147)

So I have a negative DMI when I use the IRS allowances and the allowed expenses from the Chapter 7 means test. I think that I am able to use actual forward-looking numbers for Schedule I-J but I was unsure. That's why I used the IRS numbers from the Chapter 7 means test.

The only thing that I am really worried about is the child care expense - I pay the care provider in cash. She is excellent and very affordable. Also, her schedule is very flexible. Most daycare centers want a fixed weekly schedule that doesn't change but my provider doesn't have issues with changing schedules. (My spouse works different days every week). Also, my MIL frequently insists on watching my son as opposed to the DC provider and I am not really in a position to tell her "no." Long story short, the $340 per month child care will fluctuate. Some months it will be above the $340 and some months it may well be less than $100. It is very difficult to tell and my lawyer keeps telling me not to worry about it. Hopefully the folks on this board can offer some insight.

Thanks-
-brokeincmch

[OhioFiler]

Schedules I and J are not where you use IRS standards. I and J are where you list ACTUAL income and expenses. The IRS standards are only relevant on B22, the means test.

Your attorney is most certainly correct. You have nothing to worry about based on your below median income.

[tcreegan]

Hi brokeinmich,

I think that I am able to use actual forward-looking numbers for Schedule I-J but I was unsure. ....yup, I & J are your post-BK projected expenses.

The IRS standards from the means test are OK for some comparison, but for Schedule J you want expenses that are reasonable and close to what your actual expenses will be. And not the "I am so broke I am filing BK" version of expenses, what some reasonable person would normally spend. (usually people in BK have scrimped and cut corners so long they don't realize what "normal" people actually spend)

I agree w/ your attorney, I don't see the daycare being a problem. $340 a month is dirt cheap compared to most daycare centers, and in many areas that would be the weekly cost. Here in Colo we are supposedly on the high side, but saw $59/day for a national chain over in Steamboat, $800 a month for HeadStart in Denver, $500 a week for a nanny, $10/hr teenage babysitter...heck, even if you get a teenage babysitter $340 isn't going to cover a week, much less a month!

Get prices from some daycare home/centers in your area, you can show the trustee how much you save each month....

Good luck to you, hope everything goes smoothly!

Tom in Colo

[debee]

I would use your actual numbers for fixed expenses like rent/mortgage, life insurance, etc and I would stretch up to the standards (as far as you can within reason) on the flexible amounts.

If you're renting, your housing maintenance expense would be less than the standard, but if you owned a termite-infested home with three broken windows and pots and pans spread about to collect the dripping rain, then you would have a defense if quizzed over a larger than usual maintenance amount.

If someone in your family has a medical condition and you have more than average copays, prescriptions, OTC items, etc then you may end up with a documented expense over the standard.

You want to look at your situation and take the expenses you are allowed to take according to your circumstance. Some items may be over the standard, others below.