Allowable living expenses...

[reallynervous]

I am compiling our monthly living expenses and I am reviewing those items that we only pay annually. I have two questions related to them...

1. For those annual items, like car registration renewal, do you factor that in somehow to our monthly expenses? Like take the amount divided by 12 or anything?

2. Is AAA coverage allowed? We drive older cars and dh works out of town so we have this coverage. It has really saved us on towing fees. We pay this one annually as well.

Thanks!
reallynervous

[lrprn]

1. For those annual items, like car registration renewal, do you factor that in somehow to our monthly expenses? Like take the amount divided by 12 or anything?

Our Ch 13 lawyer added our annual fees into their appropriate Schedule J categories - for ex, our annual car registrations were added into our auto costs. Anything that didn't fit in a category he added into the 'Line 17-Other' category which had all those costs listed in a Detailed Expenses attachment. All costs on each line of Schedule J were totaled, then divided into a monthly figure.

2. Is AAA coverage allowed? We drive older cars and dh works out of town so we have this coverage. It has really saved us on towing fees. We pay this one annually as well.

Trustees vary individually about what they will allow and what they won't. Your lawyer will be able to tell you if this cost will fly in your district with your trustee or not. Another option - if you are in a state that allows a wild card $ amount in your exemptions, you may be able cover this cost under here if you aren't using the entire amount to cover other assets or expenses.

HTH!

[SinkingFast]

I would imagine you'd just add up your vehicle registration costs and AAA membership, divide by 12, and tack that onto your monthly transportation costs.

That's where our attny put our registrations, monthly gasoline, and repairs costs. I would think AAA should be a part of your auto expenses too.

[reallynervous]

Thank you both for replying! You are both always so helpful. I appreciate it.

reallynervous

[ksgirl38]

I guess when I filled out the questionnaire I came up with excess income. I guess this is what happens when you stop paying your credit cards. I'm trying to come up with some other expenses that I may have missed. Can you include payments to an IRA account if they are voluntary? I have a separate IRA outside of work, but didn't know if that counted as an allowable expense or not.

[ValleYum]

I don't think non-mandatory/voluntary retirement contributions are allowed.

Do you have term life insurance? Disability insurance? Renters insurance? Lowering your deductible on car insurance is a good idea as you will likely have no credit cards to fall back on to pay a big deductible. EDIT: we also increased our limits of liability-didn't want a lawsuit with not being able to file another BK for 8 years. We also got a $1 M liability umbrella policy.

You can also post a list of expenses here and we can look at those for you and see if you missed anything.

You don't have a car payment do you?

[ksgirl38]

Yes I have a car payment. I'm not really ready to lower the deductible yet.

[ValleYum]

Yes I have a car payment. I'm not really ready to lower the deductible yet.

Lowering your deductible is one of the legit ways to increase your expenses for a BK. It isn't necessarily a permanent change...

[ksgirl38]

Lowering your deductible is one of the legit ways to increase your expenses for a BK. It isn't necessarily a permanent change...

I'm already at $250, I think. Besides I'm not sure I'd have enough time at this point anyway. I'm filing on Thursday next week.

[ValleYum]

So what are you planning to do to use up that excess income between now and then?

[ksgirl38]

It's gone, I just needed to redo the budget on the paperwork my attorney had. I realized some categories I had underestimated so I was able to increase those. Guess I was looking at it more as how I'd do my budget after the BK than before. It's nice having that extra cash available that was going to the credit card payments. I had all of July's bills paid by the 10th of this month and some of August's as well.

[ValleYum]

Good job!

I wish you well on your filing next week!

[ksgirl38]

Good job!

I wish you well on your filing next week!

Thanks.