Allowable expenses?

[mmo1]

I know the basic allowed expenses, but I cant seem to get an answer on any of these:

Gym membership
Car maintenance (if vehicles are owned outright, but OLD with over 150k miles on each )
Vet bills
Home rental expenses - carpet cleaning once a year? replace air filters etc? (not included in our rent by landlord)

Do you budget for HIGHER bills in the summer? Gas, Electric etc?

Thanks all!

[justbroke]

Gym membership

This would be under entertainment. If it is doctor ordered, this could be a separate expense for medical reasons. There are no guidelines.

Car maintenance (if vehicles are owned outright, but OLD with over 150k miles on each )

The IRS guideline, which many Trustee follow, is $200/month expense allowed if the car is owned outright and is either over 75,000 miles or more than 6 model years old.

Vet bills

Not allowed. Having a pet is not a necessity. You will have to figure out how to pay these out of your other allowances by budgeting or reducing costs in other areas. Same goes for pet food.

Home rental expenses - carpet cleaning once a year? replace air filters etc? (not included in our rent by landlord)

This is already included in the IRS' non-mortgage/non-rent expense.

Do you budget for HIGHER bills in the summer? Gas, Electric etc?

Yes, you should always add up your bills for an entire year then divide by 12.

[mmo1]

This is already included in the IRS' non-mortgage/non-rent expense.

12.

What is this expense? I am not familiar with that? Is this outside of our normal rental payment each month?

TIA!

[justbroke]

What is this expense? I am not familiar with that? Is this outside of our normal rental payment each month?

It's the in United States Trustee Program (USTP) list of expenses. They split mortgage/rent expense from non-mortgage/non-rent expense. The non-mortgage/non-rent part counts things like renters insurance, cleaning, etc.

If you are under the median and/or are filling out Schedule J, you just need to think of all those non-rent/non-mortgage things you spend money on related to your housing. Remember that non-rent/non-mortgage expense includes energy charges, basic phone service, and other things.

[SMinGA]

Do you mean expenses for 'passing' the means test? Or for use on schedule J?

Means test has some limitations, but you also have a 'misc' category. Things that don't fit elsewhere can go into the misc.

Once you're beyond the means test, your actual expenses should be on schedule J. The trustee may challenge some of them however.

For utilities, budgeting for high/low months can be a challenge. I recommend call your utility companies and ask about a budget billing plan. They can look at the prior 12 months and put you on a set payment that is the average of the past year. If your usage changes up or down in a major way, they would adjust the plan every year or so. It makes it much easier!

[ColoradoBell]

If you are doing a 7 and pass the means test, are you sstill limited to certain expenditures like ....not being able to count Vet bills for goodness sakes? Or is this only if you are doing a 13?

[justbroke]

If you are doing a 7 and pass the means test, are you sstill limited to certain expenditures like ....not being able to count Vet bills for goodness sakes? Or is this only if you are doing a 13?

I don't understand the question. You wouldn't need any extra expenses if you "pass" the means test.

Sorry, but the overwhelming majority of courts -- and Trustees -- will say that your personal choice to have a pet, should not be a burden on unsecured creditors. Harsh to hear for almost everyone, but completely true. This is no different than you housing and feeding your "fiance" when you have no obligation to house or feed the fiance. Harsh, but true.

Of course, morally, you need to pay for your pets care and food, but the court is only saying "not at the expense of creditors" whom you stopped paying.

[SMinGA]

Our atty listed 'misc' as $X and then itemized that. It included pet food/supplies, school lunches/field trips/school supplies and such averaged monthly. It was not a problem for us.

Granted, our 'misc' amount was within the IRS guidelines and not an exorbitant amount on pet care. While a pet is not a necessity, our pets are part of the family and it would be hard on the kids to lose them. Granted, when we started cutting back we did find a home for one dog. Leaving us with a dog and 2 cats.

[justbroke]

Right, if your pet food fits within the Food&Clothing allowance... purrfect! (Pun and misspelling intended.)

[SMinGA]

Cute, but not what I said. The IRS standards allow a 'misc' category & amount. That is what we used. Not food/clothing.

Right, if your pet food fits within the Food&Clothing allowance... purrfect! (Pun and misspelling intended.)

[justbroke]

Cute, but not what I said. The IRS standards allow a 'misc' category & amount. That is what we used. Not food/clothing.

I'm sorry, I'll be more clear. There is no IRS "misc" allowance or category. That miscellaneous expense is part of the Food&Clothing allowance. To be fair, it's actually called the "National Standards: Food Clothing & Other Items" allowance. For a family of four the miscellaneous expense portion, of the $1,370/month Food&Clothing allowance, is $235/month.

The IRS doesn't define "miscellaneous" but you could use portions of that to feed a pet, if you prefer. It wasn't meant to be used for pets, but it's just an allotment and one could choose to smoke instead. Unfortunately, the entire $1,370/month for Food&Clothing includes school lunches too, so the money disappears fast when you have children in school who don't qualify for free meals. (Although Florida fees all school-aged children breakfast for free, they don't do lunch for free without qualification.)

I personally spend $150/month on school lunches for the 2 children in school. I think I spend much more when they are out of school. As a prior Chapter 13 debtor... money can go real fast if you're spending it on "miscellaneous" expenses. You'll find your budget incredibly tight and will start hating Chapter 13 within a year.

[ColoradoBell]

I'm sorry that my question posted above was confusing.
I wondered if the expense budget is only for Chapter 13 and not Chapter 7.

[justbroke]

I'm sorry that my question posted above was confusing. I wondered if the expense budget is only for Chapter 13 and not Chapter 7.

It is for both. The United States Trustee Program (USTP) publishes a set of "allowable" expenses (or limitations) based on Census Data and the IRS's Expense guidelines. This was primarily meant to be used for the Means Test, but has become the "standard" that many in the USTP use as the basis for examining and/or setting expenses.

[SMinGA]

Thanks for being patient and explaining - I didn't realize the misc was indeed part of the f/c category. For us I suppose it was not an issue because we actually spend less than allowed in pretty much all areas. Amazing what smart grocery shopping can do! We make a menu for the week, and shop accordingly.

We did get on reduced price lunches this year - and that helps ALOT. $.40 per meal x 3 is much easier to handle than $1.60-2.00 per lunch x 3. Breakfast at home. (Middle school is higher than elementary, I don't want to know what high school costs.) In the summer that 'lunch money' is converted to more spent on actual groceries of course.

[justbroke]

Amazing what smart grocery shopping can do! We make a menu for the week, and shop accordingly.

I think groceries is the single category that can be easily effected by smart shopping (2 for 1 specials, etc). I know I've tried EVERYTHING to affect my home energy bill, but we had a cold winter in Florida this year, and my average went up, unfortunately.

We did get on reduced price lunches this year - and that helps ALOT. $.40 per meal x 3 is much easier to handle than $1.60-2.00 per lunch x 3. Breakfast at home.

My oldest child spends, well is allowed to spend, $5.00 on lunch. And he still says he's hungry. Kids!