Sch J Transportation Expenses, How to figure?

[ThreadsSnapping]

I am trying to work on the Schedule J and have no idea what to include for the transportation expenses. Some are easy, such as:

gas - $500 month minimum, probably gonna be higher real soon.
oil changes - car is $55 every other month and truck is $70 every 3 months. $So about 50 a month.
tires- Truck is about 3 tires a year at $160 each (it's a dually and 2 tires a year need to be replaced and 1 usually get blown out). Car goes through at least a full set a year due to an alignment issue on the passengers side that wears out the tires unevenly on the drivers side. Not really repairable. Car tires are about $100 each. So, about $75 a month there.

What I'm not sure of is how to figure out repairs. We have a 2001 car with 111k miles and a 2000 truck with 145K miles so they are going to need repairs in the future but what amount to include. We have been lucky so far with no major repairs but they are starting to need repairs a little more often and just the things that have to be replaced.

What should I put for repairs on the cars? Any opinions, suggestions or experiences.

I will be seeing my attorney this week, not sure when, waiting for a part for the car. I just want to go in with an idea of what to expect and something to go off of.

I'm in Wilson county, TN if that makes a difference.

Thanks,
TS

[HHM]

You need to be careful here, there are IRS standards for Vehicle Operating Expense. It sounds like you are going to far exceed that amount, so you "may" need to be prepared to justify your expense.

Also, keep in mind that chapter 7 BK is a "snapshot" of your expenses. You can amortize some yearly expenses, but you can't really do that with "unexpected" or "future" repairs, after all, you have not basis for doing so.

http://www.irs.gov/businesses/small/article/0,,id=104623,00.html

(Note, you can claim an additional $200 per month for vehicles with over 80,000 miles).

[ThreadsSnapping]

So, are you saying that I only get $402 a month for operating expenses? We spend about $125 a week just on gas, $50 on my car and $75 on his truck. It would be about $135 to fill up his truck. Just about everyone I know around here is spending $100-$150 a week on gas at minimum. Are they really going to fight me on that with the way gas prices are right now? We use our checkcard for gas so that is provable. If it is the $402 and $200 extra a month for each car for a total of $802 a month, that would be workable. Or can I take my gas costs plus the extra $400 a month?

As for the repairs, we have been putting them off as long as possible or doing just the absolute minimum to get by. The truck needs a new serpentine belt that about $80 and 2 new tires at $155 a piece as they are getting kind of smooth and will need to be replaced soon. Car will also need at least 2 as they just wear out due to the alignment problem. I can get receipts that prove that we go through about 4 new tires a year on the car. They are $90 a piece. Both also need new brakes and rotors all around. We have bben getting by with replacing only the front brake pads but they are getting to the point where they will have to be replaced. It will be almost $1000 to replace all the brake parts and that is for just parts. Hubby and his brother will put them on. We've been putting them off since we had no money to pay for them due to paying everything else.

All the repairs I'm talking about are ones that are needed now or will be needed in the next few months. I can get letters from mechanics if needed to prove that they are needed but they tell me about the rotors for my car everytime and the brakes, well, it's just their time to be replaced. The only thing we might be able to get away with not doing is replacing the back drums on his truck but the shoes will still need to be replaced. The door handle on his truck and a set of bearings also need to be replaced also but we already have the parts for them. I'm just wondering how much they will fight with me on the repairs.

And with cars over a certain milage or age, isn't a certain amount of repairs to be reasonably expected?

The car only has 8 payments left and the truck about 16 so we don't really want to trade them in for new cars and payments. We haven't had any major problems with them, just your regular maintenance stuff for the most part. Everything else is pretty much right on par with IRS standards except for this.

TS

[dragonnfly]

you can claim an additional $200 per month for vehicles with over 80,000 miles.

HHM - Can you please tell me when I might find that above info its official written form?? I really need help in the transportation Department. Thanks Dragonnfly

[HHM]

The overall point, at least for BK, is that you need to substantiate the expense if it is over the allowed standard. If you can substantiate the expense, AND the expense is reasonable, you should be ok. However, you have an uphill battle when you are over the regional standard.

Big picture...do you really need your auto operating expense to be that high to get negative disposible income. Are you over the median?

[dragonnfly]

Yes we are over the median and we disagreed with our lawyers paralegal in regards to the amount we were allowed to claim for transportation. With gas at $4+ a gal. about all we were allowed to claim was for gas. Our vehicles have 111,000 and 197,000 miles on them we have just had a continuation of our 341 for more information. But no I dont yet know what information they want. But if I could show my lawyers office that in writing it would really help. I am trying to fight a conversion to a 13 and at the same time preparing for a 13 by getting as much cushion as possible. I do agree with the fact that a 13 wouldn't be the end of the world but I want to be one of those ch 13 people on here saying "Can I contribute a little to my 401K" not one of the ch 13 people say "No money left over!!" Thanks Dragonnfly

[Phillymanhere]

Dragonfly,

Since others haven't chimed in, I will. I can find references to the $200 a month extra allowance for older cars on the internet, but I can't find it on a irs site ... or a bankruptcy court site.

Maybe you can get on the phone and call the irs for this information (they have a help line or information line) and/or you can call the local bankruptcy court. Ask them about this extra allowance, where it is announced, etc.

Hopefully someone else will have the exact link for you ... Good luck.

[ThreadsSnapping]

In regards to the extra $200 month for older vehicles, here is an appellate panel decision that references it.

http://www.mow.uscourts.gov/opinions/bankruptcy/bap/07-6050.pdf

Not a direct link but a good source of info. I haven't gone further than that decision so it may be in the footnotes.

TS