IRS rent standards vs. actual rent expense, confused!!

[sodone]

I didn't ask our bk atty yet about this, but I am confused a bit.

Background: on the means test we are a family of 3, however the fact that lifestyle wise/rent due to my stepson, our housing expense is a family of 4.

Our rent we actually pay is much higher than the IRS allowance(we live in Los Angeles, and if anyone can find a place that is only 1400/mo with 3 bedrooms in a safe neighborhood, yeah right) We cannot live in another area to cut costs due to Dh's visitation/stepson's residence.

How does a trustee look at the actual rent vs. the IRS standard? Our rent is 900/mo more than the standard. And unless we got rid of all our animals, and the baby my dh and I shared a room for the next several years, the rent would still be higher than that allowance.

Are we screwed? the home is in foreclosure, and getting this place before our credit went bad I thought was a smart thing to do, but now I am scared we messed up as far as the bk thing.
With the IRS standard, we are negative 200/mo if we wait to file in Dec(my salary isn't included, my dh makes over the median, however with all his financial obligations and our expenses we pass the means test), and risk losing our only vehicle left - our atty told us that he does not want us to be in the black on our schedules so we do not go to ch 13.

Can anyone help clear up this issue for me re: the living expense issue?

[lrprn]

Background: on the means test we are a family of 3, however the fact that lifestyle wise/rent due to my stepson, our housing expense is a family of 4.

What matters is how much total time the stepson lives with you in your home. There have been cases where trustees have stated that an older teen living away at college can't be included in the family number because they don't live at home enough to impact family living expenses significantly. How much of the last year has the stepson lived with you in your home? Who claims him as a dependent on their annual income taxes - your husband or his ex? Does your husband pay his ex child support for the stepson?

How does a trustee look at the actual rent vs. the IRS standard? Our rent is 900/mo more than the standard.

The B22A forms used to file Ch 7 state on Line 21: "if you contend that the process set out in Lines 20A and 20B does not accurately compute the allowance to which you are entitled under the IRS Housing and Utilities Standards, enter any additional amount to which you contend you are entitled, and state the basis for your contention in the space below." Your lawyer will enter your real rent on Line 21 with a brief explanation. As long as your rent is in line with your community rent average, it shouldn't be a problem.

[sodone]

Thanks L,

My stepson Lives with us 40%. My husband pays child support monthly.

His ex claims my Stepson on the taxes. However, due to him being a boy and of course him needing his own room, we had to get a 3 BR place, and we have a newborn daughter.

I didn't know that the lawyer would make that line for the housing higher, I didn't know that that was allowed.

If that is the case and we jack up the rent amount, then our balance at the end of the form 22a means test is going to be negative about 1000k, that's not good isn't it? We don't spend the allowed expenses for household goods at all (we have 350/mo for food, cleansing supplies and baby supplies and dog food, we get help from family via gift cards at times, and live at walmart, plus live off of PB&J alot, its not easy, but doable, at least till this is over).

Since we provide our actual living expenses and get to list our real rent on the schedule J, then shouldn't it be left alone on the means test(22a)? We have left over 50 dollars of disposable income after filling that out, being able to use lower numbers than the state allows for expenses(food), and are able to put in our car payment and "squeeze" by hopefully so we can reaffirm the car. If we change the 22a form to put more in for our rent, then that hurts us I would think to keep the car and our PMSI's(all our furniture!!).

Ugh.

[lrprn]

My stepson Lives with us 40%. My husband pays child support monthly.His ex claims my Stepson on the taxes. However, due to him being a boy and of course him needing his own room, we had to get a 3 BR place, and we have a newborn daughter.

This is one of those situations that needs interpretation from a few experienced bankruptcy lawyers in your area who know the culture and earlier decisions of your local bankruptcy court. Could go either way whether you can file as a family of 3 or 4.

Since we provide our actual living expenses...

You don't have to list your actual living expenses on your bk forms. With the help of your lawyer, you figure out the *reasonable* monthly living expenses for your family size lving in your community. That's what goes onto the forms. An experienced bankruptcy lawyer will know what living expenses the trustees will accept and at what $ levels.

Sounds like you would benefit a great deal from talking with 3-4 bankruptcy lawyers in your area. Most bk lawyers give free consultation visits, so make a few calls and schedule them. You will learn a great deal about what's going to be possible in your case and what isn't.

Good luck - keep us posted about what you find out, ok?