Please critique my Schedule J

[Faith527]

Hi again, I agree, your medical will be fine. I thought that perhaps you may have school related costs for your special needs children, ie. tutoring for time missed at school due to their disability, etc. Good luck!

[clb24ecb1]

Hi again, I agree, your medical will be fine. I thought that perhaps you may have school related costs for your special needs children, ie. tutoring for time missed at school due to their disability, etc. Good luck!

not quite yet! Our daughter is doing great in school and luckily my son is still in preschool (developmental preschool provided by the school district) and he has some more orphanage delays than my daughter so I'm sure we'll be there soon when he gets into elementary!

[flashoflight]

I think so, because I’m afraid of tying ourselves down to a Chapter 13 payment with so much unknown on the horizon. Future raises for 5 years going to a trustee? We have kids in competitive sports and it’s just completely out of the question to pull them from those sports. It seems as though we wouldn’t have options to even better ourselves for over 5 years. If I let everything charge off at least I’m in the driver’s seat instead of a trustee for five years. Does that make sense?

You can cancel your Netflix, cable TV, DisneyPlus, etc and use the funds towards sports in a 13, so it's really up to you whether to keep them in sports or watch TV. Why should your unsecured creditors be paying for extra recreation well above the usual amount? And infants don't need $50 in entertainment a month. So you can't just multiply $50 by the number of heads. I'm not trying to be mean to you. I'm just acting like the trustee who is going to slash your special circumstances on the means test and kick you into a 13 and then the next trustee might slash your recreation budget in schedule J for the same reasons.

Sometimes when you pull receipts for the eventual trustee fights (eg. pets and home maintenance), you'll find that you actually spent an ungodly amount on Fido over the past year or two at the vet or groomer and need to significantly increase the amount. That can help a lot in the special circumstances part of the means test and keep you in a 7. Nobody is going to ask you to put your dogs and cats in the pound vs sports can be cut. I think you should spend the weekend trying to get more receipts so you can increase pets, fuel, and home maintenance.

I think you'll get into a 7 but you and your lawyer are going to have to work hard for it with the receipts and the justifications.

[clb24ecb1]

I completely understand what you're saying. I mean technically I don't need $50/mo entertainment either! We could totally cut two of the TV things and it wouldn't be a huge deal. But let's say the trustee will allow us $200 for a family of 7 for entertainment, or $150, or whatever, I'll take away certain things to allow for others. What I guess I'm worried about happening if a trustee saying "well you don't need this/this/this, you need to be in a 13" when I could have taken those things out and still been in a 7 because I could have added money to section XYZ. So I take out newspaper (which we don't even use much), two TV subscriptions, and our "ect" spending. That saves us $100/mo on the budget. But as others have said it would be more than justifiable to add an extra $50-100 in the car maintenance category. So really- my budget COULD look different and still be OK, but I don't know it until a trustee tells me it's not OK, and I hate that feeling! And then how does it look if they tell me that $100 needs to be cut and THEN I go back in and say "well I'm going to add an extra $100 to my car repair budget", then it just looks like I'm intentionally fudging numbers. I'm trying to be realistic but again, so many things are hard to quantify. I honestly don't know how we're going to do home maintenance "proof" when so much of it is stuff that needs to be done that we've been putting off. I'm waiting for a letter from our homeowners insurance telling us our policy is going to be cancelled because we haven't had that damn tree trimmed.

And pet costs are hard! My 16 year old cat always has something wrong with him. I don't know if it was 2018 or 2019 when we couldn't figure out what the heck was wrong with his eye and it was probably close to 1k in vet bills. The younger cat had an emergency vet trip on Christmas Eve 2017 and that was like $800. How do I quantify those numbers into a schedule J budget? They happened in the past, I'm not sure if they'll happen in the future.

Same with healthcare, I was in the ER twice last year and ended up with abdominal surgery. I was the big spender in emergency healthcare in 2019. In 2018 my son broke his ankle and had two surgeries. In 2017 right after our daughter came home she had a ton of unknown stomach issues where we were in the ER probably 3 times in a month. How do those end up looking on a schedule J? I don't know if we'll have a great year with no problems, or if a kid is going to break their ankle, another one end up in the hospital from an asthma attack, and we hit our family out of pocket max.

Whew, I'm an overthinker.

[justbroke]

Sometimes we just overthink things. Stick with what you have, work with your attorney, and just prepare in case there are questions.

[flashoflight]

clb24ecb1
Means test:
On the means test you use IRS values for a whole bunch of things and add-on where permissible. In certain sections like medical and mortgages, you can add on in the means test on top of the IRS values with receipts. The problem is there is no section for extra fuel, pets, 401k loan, and recreation so you go to the dreaded special circumstances section where the trustee will scrutinize deeply. Extra fuel and pets you can justify. You need fuel to go to work to repay your creditors. Cats and dogs should not get a death sentence in order to pay creditors. 401k is a no. Recreation is a likely no.

You still need to pay attention to your J for the recreation and 401k loan because the trustee can use the understated expenses against you and kick you into a 13. Trustee will use whatever looks worse for you.

Most people trying for a 7 don't need to resort to putting anything in special circumstances to easily pass the means test. Unfortunately, you do. Above median folks with big mortgages, big medical expenses, back non-discharegable taxes, and big charitable contributions are the ones that can pass with less effort. Of course all of those items have spots on the means test unlike in your situation.

Medical:
The ch13 budget is terrible when trying to account for one-time expenses like one time stomach issues, one time ankle break, one time root canal etc. You cannot say you'll need to budget for 5 root canals over 5 years. It's much better for those with chronic conditions that need treatment for years. If your receipts are full of ankle breaks and root canals, a mean ch7 trustee could cut you down real hard and a ch13 trustee very likely will cut you down. You could try to submit estimates for future work, but why don't you have anything in the past for similar treatment? Past bills are much better than forward looking treatment estimates.

Pets:
Take the old receipts you want to submit and divide by the number of years covered. Do whatever number of years or months makes the math most favorable to you. Make sure to include pet food, cat litter, nail trim, vaccinations, prescriptions, etc. 16 year old cats don't get cheaper to maintain. Put in the high number backed up by receipts. Trustee knows this. I don't think you will have a problem with this.

Home maintenance:
Home Depot is easy to get your old receipts online. Lowe's is harder but can be done. Get your plumbing bills because trustees know the pipes don't get better with time. Get an estimate for future work on contractor's letterhead and submit it but past expenses are better than future when your lawyer haggles with the trustee on this number.

If you end up in a 13:
If you are above median, you are not entitled to use the IRS recommended amounts if you spend less. You must use your actual amounts. That is why you didn't get a cheat sheet from your lawyer with IRS amounts. If I were your lawyer in a 13, I would tell you to not pay attention to the IRS amounts (except for food/housekeeping which has a cap regardless of actuals) and use only receipts to come up with your numbers. Your lawyer's knowledge of the trustee will then guide you into what you can get away with.

[clb24ecb1]

clb24ecb1
Means test:
On the means test you use IRS values for a whole bunch of things and add-on where permissible. In certain sections like medical and mortgages, you can add on in the means test on top of the IRS values with receipts. The problem is there is no section for extra fuel, pets, 401k loan, and recreation so you go to the dreaded special circumstances section where the trustee will scrutinize deeply. Extra fuel and pets you can justify. You need fuel to go to work to repay your creditors. Cats and dogs should not get a death sentence in order to pay creditors. 401k is a no. Recreation is a likely no.

You still need to pay attention to your J for the recreation and 401k loan because the trustee can use the understated expenses against you and kick you into a 13. Trustee will use whatever looks worse for you.

Most people trying for a 7 don't need to resort to putting anything in special circumstances to easily pass the means test. Unfortunately, you do. Above median folks with big mortgages, big medical expenses, back non-discharegable taxes, and big charitable contributions are the ones that can pass with less effort. Of course all of those items have spots on the means test unlike in your situation.

Medical:
The ch13 budget is terrible when trying to account for one-time expenses like one time stomach issues, one time ankle break, one time root canal etc. You cannot say you'll need to budget for 5 root canals over 5 years. It's much better for those with chronic conditions that need treatment for years. If your receipts are full of ankle breaks and root canals, a mean ch7 trustee could cut you down real hard and a ch13 trustee very likely will cut you down. You could try to submit estimates for future work, but why don't you have anything in the past for similar treatment? Past bills are much better than forward looking treatment estimates.

Pets:
Take the old receipts you want to submit and divide by the number of years covered. Do whatever number of years or months makes the math most favorable to you. Make sure to include pet food, cat litter, nail trim, vaccinations, prescriptions, etc. 16 year old cats don't get cheaper to maintain. Put in the high number backed up by receipts. Trustee knows this. I don't think you will have a problem with this.

Home maintenance:
Home Depot is easy to get your old receipts online. Lowe's is harder but can be done. Get your plumbing bills because trustees know the pipes don't get better with time. Get an estimate for future work on contractor's letterhead and submit it but past expenses are better than future when your lawyer haggles with the trustee on this number.

If you end up in a 13:
If you are above median, you are not entitled to use the IRS recommended amounts if you spend less. You must use your actual amounts. That is why you didn't get a cheat sheet from your lawyer with IRS amounts. If I were your lawyer in a 13, I would tell you to not pay attention to the IRS amounts (except for food/housekeeping which has a cap regardless of actuals) and use only receipts to come up with your numbers. Your lawyer's knowledge of the trustee will then guide you into what you can get away with.

For medical I can easily use past medical bills to average out over the months and probably come to a higher number than I wrote down, but I only have one gallbladder, pretty sure the trustee wouldn’t allow for past gallbladder removal to estimate future expenses? Medical is just a huge wildcard for a family of 7. Something expensive will undoubtedly happen every year but who knows what. Ongoing medical expenses for the special needs kiddos is easy. Dental is ridiculous, we just spent about 1k last month for 7 dental visits and resulting treatments for a couple kids. My oldest just had oral surgery for the next stage of his braces. I’m awaiting that bill 😬

I honestly don’t see how we’d work in a Chapter 13. I think the bigger the family, the older the cars, the older the house the more unknowns you run into. If a Chapter 13 plan doesn’t leave wiggle room then we’re just looking at putting ourselves in another position to be in trouble financially when something inevitably happens, only this time without having any ability to pay for them. We’ll see what happens!

I’m curious- from almost all the websites I’ve seen it’s as simple as “you’re under the median income, you’re good to go, trustee won’t have interest in you” but it seems much much much more in-depth than that and schedules I and J were a formality that were reviewed but not raked over coals. Coming up with receipts will be an absolute nightmare and yes, we do do most of the home improvement stuff at Lowe’s 🤦🏼♀️

[justbroke]

I’m curious- from almost all the websites I’ve seen it’s as simple as “you’re under the median income, you’re good to go, trustee won’t have interest in you”

That is true. In most cases those under-the-median are less likely to be scrutinized. This is because those under-the-median don't need complete the entire means test to determine whether they can "afford" to pay the creditors a dividend.

When you are under-the-median but have high income, the UST/Trustee will look to your Schedule I and Schedule J. What you put on Schedule J can have a big impact. For example, you may be under-the-median, but have $2,000/month in DMI because you are a high wage earner. If your Schedule J shows a significant amount of DMI (about $250/month), that could trigger the UST to look more closely and to seek a dismissal (or conversion). Having the right expenses to show that there little to no DMI is why you create that expense sheet when you're under-the-median.

Unfortunately many web sites are just talking about the Means Test when they say "you’re under the median income, you’re good to go, trustee won’t have interest in you." But, the Means Test is just "the beginning of the inquiry" (as many judges like to say). When you don't complete the Means Test, the Trustee/UST will look to Schedule J to see if it shows significant DMI. (Don't ask me what is a significant DMI amount, but it is probably around $250/month.). This is why the expenses and categorization of those expenses are important for Schedule J. An experienced attorney will make sure that the expenses are grouped and categorized so as to not cause the UST/Trustee to poke at them.

Again, we may all be overthinking this and you may breeze past the UST/Trustee's initial look at your case. In other words, they may just see "below the median income" and not think twice about scrutinizing Schedule J (the expense detail). I think your attorney knows what they are doing and will make sure the UST/Trustee doesn't think twice about scrutinizing your Schedule J.

[clb24ecb1]

That is true. In most cases those under-the-median are less likely to be scrutinized. This is because those under-the-median don't need complete the entire means test to determine whether they can "afford" to pay the creditors a dividend.

When you are under-the-median but have high income, the UST/Trustee will look to your Schedule I and Schedule J. What you put on Schedule J can have a big impact. For example, you may be under-the-median, but have $2,000/month in DMI because you are a high wage earner. If your Schedule J shows a significant amount of DMI (about $250/month), that could trigger the UST to look more closely and to seek a dismissal (or conversion). Having the right expenses to show that there little to no DMI is why you create that expense sheet when you're under-the-median.

Unfortunately many web sites are just talking about the Means Test when they say "you’re under the median income, you’re good to go, trustee won’t have interest in you." But, the Means Test is just "the beginning of the inquiry" (as many judges like to say). When you don't complete the Means Test, the Trustee/UST will look to Schedule J to see if it shows significant DMI. (Don't ask me what is a significant DMI amount, but it is probably around $250/month.). This is why the expenses and categorization of those expenses are important for Schedule J. An experienced attorney will make sure that the expenses are grouped and categorized so as to not cause the UST/Trustee to poke at them.

Again, we may all be overthinking this and you may breeze past the UST/Trustee's initial look at your case. In other words, they may just see "below the median income" and not think twice about scrutinizing Schedule J (the expense detail). I think your attorney knows what they are doing and will make sure the UST/Trustee doesn't think twice about scrutinizing your Schedule J.

I usually work just fine in areas of gray but I just want someone to say exactly what numbers to put in what category and I’ll make them work 🤣

I’m sure that’s actually exactly what I’m paying my lawyer for 🤣

[justbroke]

I’m sure that’s actually exactly what I’m paying my lawyer for 🤣

That is why we hire them!