Calculating Expenses When Filing For Chapter 13 Bankruptcy

When filing Chapter 13 bankruptcy, individuals need to provide the bankruptcy courts with a list of expenditures, or expenses, paid out on a monthly basis. This information helps the courts to determine if the individual’s debts are too high and whether or not bankruptcy is an option. In a Chapter 13 bankruptcy, it is critical for the individual to carefully consider the ability to make monthly payments to the courts as part of the repayment plan.

What To Include

The way in which an individual provides a listing of expenses to the bankruptcy courts is through a document, called Schedule J. This document is a worksheet where the individual with list expenses such as rent, food and other costs. It will not include a list of debts that will be placed into the bankruptcy, such as credit cards.

Consider the following tips for filing Chapter 13 bankruptcy and the Schedule J.

On the form, next to the specific types of debts (mortgage, car loans, etc) list the amount you pay monthly towards the debt. Be specific.
For some items, individuals will need to divide a yearly cost by 12 to get the monthly amount, even if you do not pay this amount each month. This includes homeowner’s insurance and taxes.
For expenses that are not fixed, such as utility costs, gasoline use and other items, like the average you have spent per month over the last twelve months.
For discretionary spending items, such as food, clothing, entertainment and other items, be sure to place an accurate number. There is no benefit to putting too much or too little here since the courts know what the average is likely to be.
On the last line, write down any debts not listed that you pay, such as child support or back taxes.

When calculating expenses, place an accurate number on the document, to ensure that the courts know how much income you need to put towards your bills each month. If your income is not high enough to cover these expenses plus the repayment plan payment, you may not qualify for Chapter 13 bankruptcy. If your income is too high, the bankruptcy court may rule the void the bankruptcy and require you to pay your bills back as originally planned.

Hiring an Attorney

There is no doubt that an attorney can help you to file bankruptcy, but the attorney can also help you to fill out expenses and incomes accurately, to help you to avoid the bankruptcy case being thrown out. Consider hiring an attorney before filing Chapter 13 bankruptcy.

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