Monthly Expenses

[rjmcconne]

Does the trustee examine closely the expenses the debtor lists on the expense sheet to determine if the amount of the expense is valid? For example, if I total all my expenses and add my income together and my expenses end up being $50 more than I bring in each month, and I list my entertainment as $400/month, would the trustee deem that that expense is too much and bump it down to $200 and convert my case to a chapter 13? Will the trustee usually let things like that go (and not do an investigation) as long as the expenses aren't too outrageously high? I don't keep many receipts, so it would be hard to prove that I don't spend that much a month, but then again, it's hard to prove that I don't. The reason I ask is because I may have to file for bankruptcy because I made some bad real estate investment decisions and both my houses (investment properties) have a lot of negative equity and they are in too bad of shape to sell. I can't make payments on them anymore and I'll never be able to sell them for what I owe on them. I don't want to be sued for a deficiency and i figure that bankruptcy is the only option because the lender doesn't want the houses back deed in lieu of foreclosure. The problem is that I am married and will file individually (my wife isn't responsible for any of my debt) but I have to combine our incomes and it's hard to show that we spend more money than we bring in each month. I don't want to have to file Chapter 13 because I'm scared that after the 3-5 year repayment plan is over, that those deficiencies won't be paid off and I will still owe the lender the remaining deficiency. That would basically defeat the purpose of filing bankruptcy. Would the remaining deficiencies still be discharged even if they weren't paid off under the plan, preventing the lender from coming after me? Thanks

[Dawn1970]

Does the trustee examine closely the expenses the debtor lists on the expense sheet to determine if the amount of the expense is valid?

Speaking only from my own personal experience, my trustee maybe glanced at my list of living expenses for a nanosecond, if at all. When my lawyer and I prepared this, he even went so far as to put Cable TV down as an expense, which I thought seemed frivolous. I suggested he take it off. But the way he put it was, "Hey, you want to watch CNN and keep up with current affairs don't you? That's not frivolous at all." If your lawyer is worth his/her salt, he/she will make certain that your list of current monthly payments exceeds your income so that it will be obvious you are a perfect candidate for Chapter 7, if that's what you want.

[HRx]

Does the trustee examine closely the expenses the debtor lists on the expense sheet to determine if the amount of the expense is valid? For example, if I total all my expenses and add my income together and my expenses end up being $50 more than I bring in each month, and I list my entertainment as $400/month, would the trustee deem that that expense is too much and bump it down to $200 and convert my case to a chapter 13? Will the trustee usually let things like that go (and not do an investigation) as long as the expenses aren't too outrageously high? I don't keep many receipts, so it would be hard to prove that I don't spend that much a month, but then again, it's hard to prove that I don't. The reason I ask is because I may have to file for bankruptcy because I made some bad real estate investment decisions and both my houses (investment properties) have a lot of negative equity and they are in too bad of shape to sell. I can't make payments on them anymore and I'll never be able to sell them for what I owe on them. I don't want to be sued for a deficiency and i figure that bankruptcy is the only option because the lender doesn't want the houses back deed in lieu of foreclosure. The problem is that I am married and will file individually (my wife isn't responsible for any of my debt) but I have to combine our incomes and it's hard to show that we spend more money than we bring in each month. I don't want to have to file Chapter 13 because I'm scared that after the 3-5 year repayment plan is over, that those deficiencies won't be paid off and I will still owe the lender the remaining deficiency. That would basically defeat the purpose of filing bankruptcy. Would the remaining deficiencies still be discharged even if they weren't paid off under the plan, preventing the lender from coming after me? Thanks

Hi,

You just want to reflect on your BK 7 petition, that once you pay all your: fixed monthly: descretionary, and essential monthly debts, that you have little to NO monies left to make good on your outstanding debts. You'll also, want to furnish the proof that your properties have negative equity so that the creditors don't seek them as a means convert to Chp 13. Once you have done these basic things, you should be able to walk away debt free.

Consider arranging a "free" consulation with a local BK attorney for reasurrance to your questions.

Good Luck!

[robivi3]

A cell phone is not considered "frivolous" anymore, either. I don't call basic TV service frivolous. it is a minute expense. Most HOA's do not allow old style antenneas. The 21st century is here, certain things are expected. I'm sure that in 1908 a "telephone" was considered frivolous.

The initial hearing goes very fast.