Schedule J, live in Wisconsin What do you think of this?

[Angel6726]

Filed 11-30-12
family of 6
income: 5784.42 ( husband receives SS disability)
Schedule J
Rent 1224.00
electric 350.00
water & Sewer 50.00
telephone 100.00
cable/internet/phone bundle 160.00
home maintenance 100.00
food 800.00
clothing 250.00
laundry 60.00
medical/dental expenses 150.00
transportation 182 (bus) bought a used car in 2012 but unable to pass emissions, not registered yet
recreation 200.00
charitable contributions 0
insurance (renters) 50.00
Taxes 355.00
installment payments (QVC) 295.25 (previous TV went out, purchased new one in 09/2012
Village of Brown deer 200.00 ( for husbands tickets)
payments for dependents not living at your home 200.00 (daughter in college)
Dog/Cat, food/grooming, vet visits 112.00
monthly hair cut 85.00 (husband/self)
Physician co-pays 35.00
printer paper/ink school 60.00 ( i'm currently in school)
daughte high school fees 25.00

Average monthly expenses_______5043.25______
Avereage monthly income__5784.42____________
Net income_________741.17______

I am currently working on my schedule J so I can submit them to the courts. As you can see my husbands social security disability puts us in a whole new bracket. We passed the means test under the median income. I am constantly trying to get this amount lower and I cannot for the life of me think of anything else. Any feedback would be appreciated thank you.

[HHM]

Since you posted this topic in the chapter 7 forum, I assume you are trying to make sure you qualify for chapter 7. As such, as you are probably away, you cannot show any positive, net income.

The first question on Schedule J is "what do you actually spend." Schedule J is not a guessing game. Secondarily, schedule J asks "what would you spend if you weren't making debt payments." You need to approach schedule J and each line item with the following in mind, if called to testify in court, could I prove that I spend, or would need to spend, $X on Y category.

The QVC payment is a debt, won't be allowed.

What is this expense, and is it really monthly; Village of Brown deer 200.00 (for husbands tickets)"

Does the $5,784 income number include your husbands SSDI? Also, is that number your gross or net (gross means before any payroll deductions).

Some comments on expenses?
Food: probably too low, the IRS national standard for 6 people is higher. Unfortunately, the IRS website does not break it down specifically for a 6 person hourehold, but it is around $950-$1000
Clothing, likewise, probably a tad low, you probably spend closer to $350 to $400.

Here is an expense worksheet to help you think about what you spend.

http://coloradochapter7.info/bankruptcy-expense-worksheet-to-help-pass-means-test/

Although it is on a Colorado website, the worksheet is not state specific.

[AngelinaCat]

Village of Brown Deer is a community in Wisconsin. http://www.browndeerwi.org/about-brown-deer.cfm?id=3

'Husband's tickets'--does this mean that he owes $200.00 in some kind of traffic ticket or zoning violation?

BTW, welcome to the forum.

[Angel6726]

I know that we spend pretty much all the income, what I listed is the net after taxes and includes husbands disability. Village of Brown Deer is for a DUI fine, I included QVC because it is a purchase within that 90 day period which will not be discharged. As far as receipts i really don't keep track of those. I pull the money out of my account and shop.

[keepsmiling]

Did you check to see if you qualified for a Wisconsin Chapter 128?

[Angel6726]

No I didn't. Is that something I should look into?

[Pizza]

Here is an expense worksheet to help you think about what you spend.

http://coloradochapter7.info/bankruptcy-expense-worksheet-to-help-pass-means-test/

Are those final categories for real? Wouldn't a court easily argue that if a debtor were bringing home two cases of beer each week that he/she could afford to pay creditors back some of their money? And furniture / home improvements? Seems easily arguable that the debtor wouldn't really need a new couch or new dining room furniture, or that sprucing up the kitchen with new cabinets, hardwood flooring, etc., would be far from reasonable and necessary - at least in terms of whether or not he/she should be in a Ch. 13.

BTW, I am only asking out of curiosity.

[helpmeout]

Per your calculations, you will be a Chapter 13. With a payment over $741.17 a month. Why more than what the difference is? Well, for starters, it is doubtful that you will be allowed $200 a month for recreation. And the money that you give to your adult daughter probably won't go over well, either. And just what is Village of Brown Deer? Chances are that won't be allowed, either. And home maintenance on a rental will be questioned.

Physcian co-pays would fall into medical/dental expenses. You don't get two separate categories. And I haven't even touched the cable/internet/phone bundle and other phone charges.

You may want to rethink your budget.

[helpmeout]

I know that we spend pretty much all the income, what I listed is the net after taxes and includes husbands disability. Village of Brown Deer is for a DUI fine, I included QVC because it is a purchase within that 90 day period which will not be discharged. As far as receipts i really don't keep track of those. I pull the money out of my account and shop.

So he is paying $200 monthly for a DUI? If so, that is likely to be allowed. If not, well, it's going to be taken off of your monthly budget.

[mountanddo]

I pull the money out of my account and shop.

You might want to keep track of what your expenses are and what is going where.

[ld2366eh]

We are in Illinois and I think some of Wisconsin is part of our district. We are a family of six as well. Our schedule j showed 1000 for food, 300 recreational, 75 for laundry, clothing 300 just to name a few. My attorney also claimed 300 for medical citing that it was less than IRS guidelines.

Hope this helps...

[momofthree]

I'm thinking a lot of those expenses are going to be questioned. You say "family of 6" but then mention an adult child away at college. They will go off of how many people are living in your home for the food/clothing/etc. categories. How many people are under your roof? A few red-flags: your non-rent housing expenses are $810. I can almost guarantee that's over the IRS limit. QVC debt payment won't be counted, even if you still owe it afterwards, reason being: it can be paid thru a ch.13 and they could make those payments for you, taking their fee off the top, of course. Recreations, printer paper/ink, pet expenses could all be questioned. Most tts won't allow parents to send money to an adult child who is not living at home. You have a lot of questionable items that may have a TT salivating.

Something that may help you pass the means test and avoid a ch.13? Buy 2 new cars with payments. That will give you the payments, gas, maintenance, yearly tag fees, insurance, etc. Even one car might do it, if it maxed out the IRS standard of $496/mo. Add in another $400-$500 for the other expenses I mentioned, and you may be okay. Depending how many people you have living in your home, you may be able to increase medical expenses too. IRS standard is $60/mo per person.

[HHM]

Are those final categories for real? Wouldn't a court easily argue that if a debtor were bringing home two cases of beer each week that he/she could afford to pay creditors back some of their money? And furniture / home improvements? Seems easily arguable that the debtor wouldn't really need a new couch or new dining room furniture, or that sprucing up the kitchen with new cabinets, hardwood flooring, etc., would be far from reasonable and necessary - at least in terms of whether or not he/she should be in a Ch. 13.

BTW, I am only asking out of curiosity.

The point of the spread sheet is to help a person identify how they "actually" spend their money and identify certain lifestyle traits that may need to be altered in light of the BK. The spreadsheet is designed around the IRS "broad" expense categories, but breaks them down into sub-categories that most people will have to help people capture expenses they may not otherwise. None of the categories, per se, are forbidden in bankruptcy, but some are more suspect to a reasonableness argument than others. So, as you suggest, you would "never" line item Liquor...it is in there to identify lifestyle traits...but if the expense is minor, it gets rolled into groceries. You don't line item for furniture, but you want to capture it. Furniture tends to get rolled back into home-maintenance, on a year over year basis, furniture purchases tend to be replacement items for worn out or broken items.

The over all point, and the STARTING point for schedule J is to find out...where is my money actually going. Then, with the help of a lawyer, craft a schedule J that meets your needs, whether it is to stay in chapter 7 BK, or have a livable budget for chapter 13. But posts like this bother me, because it illustrates a perception that the numbers are schedule J are made-up. They really aren't. Each number must have a basis in fact, and have justification.

[HHM]

I'm thinking a lot of those expenses are going to be questioned. You say "family of 6" but then mention an adult child away at college. They will go off of how many people are living in your home for the food/clothing/etc. categories. How many people are under your roof? A few red-flags: your non-rent housing expenses are $810. I can almost guarantee that's over the IRS limit. QVC debt payment won't be counted, even if you still owe it afterwards, reason being: it can be paid thru a ch.13 and they could make those payments for you, taking their fee off the top, of course. Recreations, printer paper/ink, pet expenses could all be questioned. Most tts won't allow parents to send money to an adult child who is not living at home. You have a lot of questionable items that may have a TT salivating.

Something that may help you pass the means test and avoid a ch.13? Buy 2 new cars with payments. That will give you the payments, gas, maintenance, yearly tag fees, insurance, etc. Even one car might do it, if it maxed out the IRS standard of $496/mo. Add in another $400-$500 for the other expenses I mentioned, and you may be okay. Depending how many people you have living in your home, you may be able to increase medical expenses too. IRS standard is $60/mo per person.

That is very much LAST resort advice. I mean really, the last thing you want to do is incur $38,000-$54,000 in new, secured, debt, just to pass the means test. Also, if your credit is shot, which it probably is if you are considering BK, the financing would be very lousy, if available at all.

[Pizza]

The point of the spread sheet is to help a person identify how they "actually" spend their money and identify certain lifestyle traits that may need to be altered in light of the BK. The spreadsheet is designed around the IRS "broad" expense categories, but breaks them down into sub-categories that most people will have to help people capture expenses they may not otherwise. None of the categories, per se, are forbidden in bankruptcy, but some are more suspect to a reasonableness argument than others. So, as you suggest, you would "never" line item Liquor...it is in there to identify lifestyle traits...but if the expense is minor, it gets rolled into groceries. You don't line item for furniture, but you want to capture it. Furniture tends to get rolled back into home-maintenance, on a year over year basis, furniture purchases tend to be replacement items for worn out or broken items.

The over all point, and the STARTING point for schedule J is to find out...where is my money actually going. Then, with the help of a lawyer, craft a schedule J that meets your needs, whether it is to stay in chapter 7 BK, or have a livable budget for chapter 13. But posts like this bother me, because it illustrates a perception that the numbers are schedule J are made-up. They really aren't. Each number must have a basis in fact, and have justification.

Very interesting. Thank you for the clarification.