Met with BK Atty...Please look over expenses and let meknow what you think...

[oc714]

We met with an atty today and decided to retain him. He feels that we will qualify for chapter 7 event hough we are over the median. The 6 motnh look back gave us 45K du to lots of OT. I've been working on our expenses and let me know what you think please. Family of 5 in CA.

Gross 7609
Net 5877

1st mortgage $2296
2nd HELOC $755
Electricity $80
Gas Company $40
Water $36
Home phone $20
Cell Phone $180
Internet $30
Cable $79
Food/ School lunches $1,150
Clothing $200.00
Medical and Dental Expenses $125
transportation $550
Estertainment $ 100
Charitable contribution $40
Car Insurance $183
personal care/haircuts $70
pet food/ dog tags $25
Car Repairs/tags $80
Bank fees for bill pay and bank charges $ 20
Cigarretes $40
retirement contribution $11
Child Care $105

TOTAL $6215.00

I did under withhold on my pay checks and attorney said he would calculate correct withholding.

Received 9K tax refund but paid the following hopefully not something that will cause any problems.

$4600 on late mortgage caught up.
$2263 late on Heloc current
$1400 atty
$ 200 food


Input is much appreciated.

[chicagoannie]

Cigarettes?! LOL, I have never seen someone list them (may not fly - put them in with groceries or personal products.)

Your medical and utilities look kind of low for a family of 5. Someone will chime in with the allowances for CA, I'm sure.

Curious...why did you spend your tax refund on the overdue Heloc/mortgage?

[oc714]

LOL!! just thought I would put them since my hubby can't quit. We want to keep the house and we thought that is the only way since we were 2 months behind. I"m just so nervous being over the median because I know we cant afford being in a Chapter 13.

[KCane28]

I am also in Ca....orange county. My expense look very close to yours and maybe a little more. We spend more on medical due to recent problems.
I haven't had my 341 yet but I will post it when it comes. My Atty thinks my numbers are good. I have been stress about this whole thing but this site does give me some piece.

[oc714]

I am also in Ca....orange county. My expense look very close to yours and maybe a little more. We spend more on medical due to recent problems.
I haven't had my 341 yet but I will post it when it comes. My Atty thinks my numbers are good. I have been stress about this whole thing but this site does give me some piece.

KCane 28 are you over or under the median?

This is so stressful but I know I couln't continue to pay $1200 on credit cards. I couldn't buy the kids clothes and other things. Hubby and I fought about money all the time and I just feel this is our only way out.

[daylate]

Not to rain on your parade but this is something I didn't know going in-even if you qualify for a Chapter 7 via the means test, you could be denied if going forward your current monthly income (Schedule I) exceeds your expenses (Schedule J) by a certain dollar amount. Assuming that your expenses above are good and the US Trustee has no problem with them based on the comments below you could have a problem


Remember when recalculating that social security will go up by 2% of your gross next Jan 1. That will reduce your net by about 150 a month. So I would include the impact of that on my next 12 months budget (Schedule J)- about 40/month with a note saying that your net will decrease nest Jan 1.

Also if you got a 9k refund in round numbers that means your net should be increased by 750 a month. Not good news. It means you overwithheld not underwitheld.

The net of these two is a 600 increase in your monthly net from what was shown above and by my calculations show you with a surplus of $262 per month which I think is over the amount you can have and still qualify for a Chapter 7.

That being said the one thing that you have going for you is the overtime-if it is not guaranteed going forward then you may be able to lower your projected income on Schedule I to get the surplus reduced or even eliminated.

Do a search on Schedule I & J=there is a lot of stuff here about this topic and was a real shock to me (and many others) when we learned of it. For some reason lots of attorneys I spoke to never mentioned it upfront. It didn't ultimately bite me but others have been impacted by it. So my advice ot you is to ask your attorney about this and make sure you understand how it works. It is extremely important to a successful Chapter 7 particularly if you are an above median filer.

Here are some links to get you started

http:
//www.bkforum.com/showthread.php?67513-Clarification-needed-The-quot-magical-quot-187-a-month-vs-25-of-unsecured-debt

http://www.bkforum.com/showthread.php?64292-Very-confused-about-Schedules-I-amp-J

And here is the link to the section of the code this whole thing falls under

http://www.law.cornell.edu/uscode/uscode11/usc_sec_11_00000707----000-.html

[helpmeout]

You may want to take a hard look at your post BK budget, because the one above will lead you back to BK. Is your house underwater? If so, a Chapter 13 may work for you. It's the only way to strip a second mortgage (you can only do this if there is no equity to cover the 2nd). And it would free up money both during the BK and after.

As for the cigarettes, well, if I were a Trustee I wouldn't allow it. I would also look for a padded budget elsewhere as some filers do to cover their addiction.

[ValleYum]

The 6 motnh look back gave us 45K du to lots of OT. I've been working on our expenses and let me know what you think please. Family of 5 in CA.

Gross 7609
Net 5877

1st mortgage $2296
2nd HELOC $755
Electricity $80
Gas Company $40
Water $36
Home phone $20
Cell Phone $180
Internet $30
Cable $79
Food/ School lunches $1,150
Clothing $200.00
Medical and Dental Expenses $125
transportation $550
Estertainment $ 100
Charitable contribution $40
Car Insurance $183
personal care/haircuts $70
pet food/ dog tags $25
Car Repairs/tags $80
Bank fees for bill pay and bank charges $ 20
Cigarretes $40
retirement contribution $11
Child Care $105

TOTAL $6215.00


Input is much appreciated.

Remember that the schedule I income is for your future income potential. Only if you are very sure you will get the overtime, would I include all of it in my budget.

Your medical and dental could be bumped up - $60/person under 65 yrs is the standard. $60 x 5 = $300 That makes the expense $175 higher and reduces your disposable income by the same amount. Items like neosporin, band-aids, Tums, etc count towards this.

I don't see any home maintenance expenses. Items like: Furnace filters, afund for a replacement roof, appliance or plumbing. Experts say annual maintenance costs average ~2% of the value of your home.

Pet expenses look okay. Did you budget for flea/heartworm control and vaccines? Here is an awesome case law decision regarding pets even though it isn't in your district: In re: Boben from the U.S. Bankruptcy Court for the District of Maryland (Baltimore Division)

Utilities could be bumped up about $35 in total (current total on your budget is $465) and still be under the standards allowed for the cheapest county in CA ($519).

Food/school lunches is okay if you are including housekeeping supplies in that figure.

Some might say your entertainment expense is high - but you have the money in the miscellaneous portion of your Allowable Living Expenses to cover it (~$245)

I don't see a car payment - just transportation expense and car insurance and care repair/tags. How many cars do you have? Do you have a car payment? Do you have a huge work commute?

Not to rain on your parade but this is something I didn't know going in-even if you qualify for a Chapter 7 via the means test, you could be denied if going forward your current monthly income (Schedule I) exceeds your expenses (Schedule J) by a certain dollar amount. Assuming that your expenses above are good and the US Trustee has no problem with them based on the comments below you could have a problem


Remember when recalculating that social security will go up by 2% of your gross next Jan 1. That will reduce your net by about 150 a month. So I would include the impact of that on my next 12 months budget (Schedule J)- about 40/month with a note saying that your net will decrease nest Jan 1.

Also if you got a 9k refund in round numbers that means your net should be increased by 750 a month. Not good news. It means you overwithheld not underwitheld.

The net of these two is a 600 increase in your monthly net from what was shown above and by my calculations show you with a surplus of $262 per month which I think is over the amount you can have and still qualify for a Chapter 7.

Part of the tax return $ could have been in the form of tax credits. That could reduce the $$ impact of the monthly income adjustment due to the underwithholding.

As for the cigarettes, well, if I were a Trustee I wouldn't allow it. I would also look for a padded budget elsewhere as some filers do to cover their addiction.

If they can't list $40 per month for the cigarettes, then they can add $60 per month for the nicotine patches/gum/smoking cessation.

We were over median but had the expenses to keep us in a Chapter 7. Our trustee never blinked at our expenses. We (thankfully) never had to deal with the US Trustee. Your attorney can best tell you the expenses that will fly in your district but it never hurts to get input because you never know what you may have forgotten.

Best of luck to you!!

[IamOld]

Thanks to all and OPoster for this interesting post. I kind of am in the same boat -ish - no 2nd mort though.

Can I ask the experts here - IF one has to do a Ch 13...somehow your income is projected? So since I have several PT jobs (plus regular job) and I NEVER!!!!! officially know how much I may make from PT job AHEAD of time (and I can VERY VERY easily document this w/out ANY doubt), can that help in Ch 13 PROJECTED income???

[discouraged]

How about garbage removal? How about sewer/street repair charges (that could be something only MN government gets away with - without calling them taxes) Laundry and dry cleaning? My lawyer listed entertainment as Recreaction, clubs & entertainment, newspapers, magazines, etc for $161 month.

Transportation seems high unless you can account for the cost. (My 40 a month went into the etc)

[oc714]

Thanks for the information and will read up as much as possible. I did forget to list home maintenance so thats an additional $120.

[oc714]

You may want to take a hard look at your post BK budget, because the one above will lead you back to BK. Is your house underwater? If so, a Chapter 13 may work for you. It's the only way to strip a second mortgage (you can only do this if there is no equity to cover the 2nd). And it would free up money both during the BK and after.

As for the cigarettes, well, if I were a Trustee I wouldn't allow it. I would also look for a padded budget elsewhere as some filers do to cover their addiction.

On the house we owe 312K and worth about 360K so the 2nd is notunderwater. This is what we were hoping to do but the atty stated it would be really hard to get an estimate less than 312K.

[oc714]

Remember that the schedule I income is for your future income potential. Only if you are very sure you will get the overtime, would I include all of it in my budget.

OT is usually towards the end of the year and it's not guaranteed every month.

Your medical and dental could be bumped up - $60/person under 65 yrs is the standard. $60 x 5 = $300 That makes the expense $175 higher and reduces your disposable income by the same amount. Items like neosporin, band-aids, Tums, etc count towards this.

I will bump this up to about $255

I don't see any home maintenance expenses. Items like: Furnace filters, afund for a replacement roof, appliance or plumbing. Experts say annual maintenance costs average ~2% of the value of your home.

Pet expenses look okay. Did you budget for flea/heartworm control and vaccines? Here is an awesome case law decision regarding pets even though it isn't in your district: In re: Boben from the U.S. Bankruptcy Court for the District of Maryland (Baltimore Division)

Utilities could be bumped up about $35 in total (current total on your budget is $465) and still be under the standards allowed for the cheapest county in CA ($519).

Food/school lunches is okay if you are including housekeeping supplies in that figure.

Some might say your entertainment expense is high - but you have the money in the miscellaneous portion of your Allowable Living Expenses to cover it (~$245)

I don't see a car payment - just transportation expense and car insurance and care repair/tags. How many cars do you have? Do you have a car payment? Do you have a huge work commute?

We don't have a car payment we have a 2001 ford that is paid for and a 2005 Dodge that is paid for too and a clunker 97 Saturn that my daughter will be driving in the 5 months. Not sure how that will our insurance will go up and gas too.


Part of the tax return $ could have been in the form of tax credits. That could reduce the $$ impact of the monthly income adjustment due to the underwithholding.

In regards to this we have childcare expenses of 240.00 a month and of course the interest paid in the house which is 25 K a year and other little things we can claim.




If they can't list $40 per month for the cigarettes, then they can add $60 per month for the nicotine patches/gum/smoking cessation.

We were over median but had the expenses to keep us in a Chapter 7. Our trustee never blinked at our expenses. We (thankfully) never had to deal with the US Trustee. Your attorney can best tell you the expenses that will fly in your district but it never hurts to get input because you never know what you may have forgotten.

Best of luck to you!!

Thanks for all your help.

Thanks for all the info will incluse Home maintenance for $125.00 since out houose in over 60 yrs old and have a lot of plumbing problems and last year replaced the roof.

[oc714]

How about garbage removal? How about sewer/street repair charges (that could be something only MN government gets away with - without calling them taxes) Laundry and dry cleaning? My lawyer listed entertainment as Recreaction, clubs & entertainment, newspapers, magazines, etc for $161 month.

Transportation seems high unless you can account for the cost. (My 40 a month went into the etc)

That's how much we spend roughly on gas due to 3 kids in 3 different schools plus commute to work and back. With gas prices in OC at $4 a gallon. My husband has a V10 and we cant afford to buy a new car and my car waste so much gas.

[oc714]

You may want to take a hard look at your post BK budget, because the one above will lead you back to BK. Is your house underwater? If so, a Chapter 13 may work for you. It's the only way to strip a second mortgage (you can only do this if there is no equity to cover the 2nd). And it would free up money both during the BK and after.

As for the cigarettes, well, if I were a Trustee I wouldn't allow it. I would also look for a padded budget elsewhere as some filers do to cover their addiction.

Thnaks for your inputWe have been on a budget without using CC for the last month and will cu where ever needed to make it work. For now we have decided to keep the house but will let go if we see that it's not working for us.