HELP - Schedule J Expense ? for Gurus

[ednasouth]

I posted something similar a couple of weeks ago and have received a response from the paralegal since then and now I'm more confused than ever.

Filing Ch 13 in Mississippi - Family of 4, disposable income is over $1,500, over the sate median by a GOOD bit.

On my Schedule J:
Food = 650.00
Clothing = 200.00
Transportation for 2 cars = 275.00
Misc = 100.00

The IRS National Standards for the time I filed are:
Food=752.00
Clothing = 244.00
Transportation for 2 cars = 402.00
Misc = 235.00

When I asked the PL about the differences she said I was looking at the Means Test Standards and she is using the Bankruptcy Law allowances/standards on Schedule J. I asked her where she got these values and she said from the attorney and she wasn't aware of where they may be posted for me to look at.

From everything I've read and researched people are using the higher amount IRS standards. Is anyone aware of these other "Bankruptcy Law Allowances" that they are using on my schedule J?

I've also researched other postings here and still can't find anything to explain the difference. They are using the IRS Standards on my Form 22 C. This is VERY confusing. Any help will be GREATLY appreciated.

[momofthree]

You are allowed to use your actual expenses on your schedule J. Some people actually put above the national standards and weren't questioned on it.

[SMinGA]

Schedule J should be your actual expenses. You should have given a list of expenses to your atty, and reviewed the schedules before signing/filing.

I'm guessing there is more on your J than what you listed. But just in case... Make sure the following common items are accurate:

Mortgage/rent
utilties
auto/life/other insurance
transportation should include gas, routine maintenance, tag renewals, tolls, etc.
clothing
household (cleaning supplies, paper products, etc.)
personal care (toiletries, hair cuts, etc.)
school supplies/education expenses
pet supplies/food
entertainment
banking expenses

Some may be lumped into misc, but at $100 that can't cover much if other things are not accounted for individually.

[newbie2]

They may also be stating lower actual expenses to free up enough money to pay on assets that you want to keep and/or priority debt.

[SMinGA]

But if her expenses are really higher than listed and that puts her in a payment she can't afford - the plan is doomed to fail.

They may also be stating lower actual expenses to free up enough money to pay on assets that you want to keep and/or priority debt.

[newbie2]

But if her expenses are really higher than listed and that puts her in a payment she can't afford - the plan is doomed to fail.

That is exactly why so many Chapter 13's do fail. There must be a reason her attorney is using those numbers, and right now we don't know what the reason is. If it isn't to protect an asset then I would certainly make another appointment an insist on using real expenses.

[tightgrip]

I have a question related to utilities. Lets say right now my power bill is 95.00 and my paralegal tells me she wants my expenses for this month then what happens if I am in the plan and we get into July and August and my power bill gets to almost 300.00? Whish it does in the summer! I don't understand that?

[newbie2]

I have a question related to utilities. Lets say right now my power bill is 95.00 and my paralegal tells me she wants my expenses for this month then what happens if I am in the plan and we get into July and August and my power bill gets to almost 300.00? Whish it does in the summer! I don't understand that?

Add up the previous 12 months of your power bills, then divide by 12. That is your average monthly bill. The paralegal and/or attorney would want the average, not what it currently is this month (for the forward look..)

[SMinGA]

Contact your power company (and other utilities) and ask about budget billing. THey can look at your prior 12 months and have you pay an average. Every year, they will adjust if necessary. It means level payments, and no big surprises.

I do this for gas & electricity. $64/mo for gas and $255/mo for electricity. Electricity has gone up in recent years - higher utility costs overall - as that was $188 a couple of years ago. But we also have opposite work schedules (I work days, hubby works nights) so someone is always home. If your house is empty during the day you can probably control that cost a bit better.

[ednasouth]

That is exactly why so many Chapter 13's do fail. There must be a reason her attorney is using those numbers, and right now we don't know what the reason is. If it isn't to protect an asset then I would certainly make another appointment an insist on using real expenses.

I am keeping my house w/ 2nd and truck, but that still leaves me with a 13% payback to my unsecured 90K cc and 70K student loan. I know I will still be responsible for the student loan after the five years. I also notice something else last night when I was going over everything line by line for the 100th time.

My 1st and 2nd mortgage arrears of 6 months are supposed to be included in the BK. They are listed on my page titled Chapter 13 Plan and total 267.04 for the 6o months. My regular mortgage and 2nd have the correct numbers on line Form 22C, line 47, but there isn't anything on line 48. Shouldn't the arrears go there? That would lower my Disposable. Also my truck is listed as 250.00 on line 47, but on the Chapter 13 Plan it is listed right at 300.00 on Chapter 13 Plan due to 7% interest they are adding. ????

I know NOW that I should have looked at this with a fine tooth comb before signing it. I really looked at the numbers I gave them, which are accurate on everything. They gave me the impression that they plug my numbers into a formula and get my plan, Schedule J. Was comfortable with the original plan, but it was rejected. I've also become more educated through this site and know what to look for.

I have some serious questions for my attorney. I'm almost to the point of wanting to start with a new one I'm so MAD! Thanks for all the input.

[ednasouth]

Add up the previous 12 months of your power bills, then divide by 12. That is your average monthly bill. The paralegal and/or attorney would want the average, not what it currently is this month (for the forward look..)

My attorney had me use the previous six months. I'm on the levelized billing so that really helped. My 6 months was also during the summer when to "level" goes up a little do to the HOT summers down here in the south.

[SMinGA]

I don't believe the Means Test is the budget used to determine your plan. Its to determine length of plan and presumption of abuse. The means test vehicle loan should be what it was before filing, I believe. The mortgage arrears would have no place on the Means Test.

Things being paid in the plan can't be used on schedule J to lower your disposable income. Schedule J is things you will be paying and whatever is left goes into the plan.

If your original plan was rejected, do you know why? Did you have expenses that were challenged? Or was it not paying enough to cover priority debts? Or were there non-exempt assets you needed to cover? If its due to non-exempt assets, then the current plan payment may be as low as you can go unless you give up some of those assets.

[ednasouth]

I don't believe the Means Test is the budget used to determine your plan. Its to determine length of plan and presumption of abuse. The means test vehicle loan should be what it was before filing, I believe. The mortgage arrears would have no place on the Means Test.

Things being paid in the plan can't be used on schedule J to lower your disposable income. Schedule J is things you will be paying and whatever is left goes into the plan.

If your original plan was rejected, do you know why? Did you have expenses that were challenged? Or was it not paying enough to cover priority debts? Or were there non-exempt assets you needed to cover? If its due to non-exempt assets, then the current plan payment may be as low as you can go unless you give up some of those assets.

I have two years of payments left on my truck. They are spreading that balance over 5 years in the plan. If the mortgage arrears doesn't have any place on the means test, why is there a place for them on line 48? Not doubting you, just trying to get a better understanding.

I'm not trying to keep any non-exempt assets, just my home and truck. I have enough to cover my priority debts, plus the expenses they have now and 13% back to unsecured, 10% plan fees, etc.

The TT challenged my daycare expenses (300/month), no receipts since we use teenage children of friends/neighbors. The bulk of this hits in the summer. Also challenged educational expenses of after school activities for children (about 175.00) month which I do have receipts for. Challenged both at 341.

My attorney sent correspondence to TT a couple of weeks prior to confirmation trying to justify. They said the TT is usually good about getting back and no news is good news, no rejections so far, etc. The TT called my attorney about 30 min. before the confirmation hearing to tell him he was rejecting it, but for us to continue working on it with him. TT will now allow 125/month for babysitting undocumented and 75/month for school expenses undocumented. Still trying to get pmt lower to be more comfortable with it for 5 years. Trust me this will still be a major change for me.

Going to try and include school lunches of about 90/month. I've heard you can do this in some areas and in others you can't. Hopefully the TT will allow since my Food allowance is below the averages. Going to try and add house alarm 45/month. Attorney is going to try to get my son's (age 10) soccer fees included (1000 yr) under a special provision since he is ADHD, is on meds and needs plenty of physical activity, and we have medical records, receipts, etc. I know the soccer fees may sound excessive, but they practice 3 times a week, and their season runs Aug 1 - the end of May. This is like an all star league and my son is very dedicated to it, been keeping an A/B average in school, good behavior, in gifted program, etc. Attorney also said to include any other expenses I may have over looked like pet food/vet visits, etc. Whish they would have told me all this the first time, just learned about some of these things on this site. If we can get these items approved, I'd be back in my comfort zone. My main problem is I never thought I'd be here so never got or kept many receipts, but can get those from vet, etc. THANKS so much for your input.

[debtinohio]

I have $40 for a house alarm on mine and $160 for Cell Phone (along with $45 for home phone) and $30 for pet care. I do not have day care, I do not have any educational/activty expenses listed. I have some other expenses that were listed a bit higher and I know my budget and can manage. My wife works PT so she watches our 3 children.

Fight for the childcare amounts, get quotes from some daycares in your area to prove the amounts are reasonable. Do you have cash withdrawl records on a regular basis for the cash to pay them?

[tightgrip]

What about sports registration fees for your children would that fall under a certain category such as entertainment? My son races mx, he also plays all three sports football, basketball and baseball.