Cant Sleep: sched J and National Standards??

[Moneypenny]

Starting to really freak, after thinking for months i had everything in hand.

I am just a teeny bit under median looking back, and am trying to calculate the look forward. This is what I got using national standards for 4 people in sacramento california:

Mortgage 1446
Utilities 512
2 Car operating cost 472
Ownership cost 2 cars (1 newer on loan, 1 very old owned outright) 994
Food 752
Housekeeping 74
Apparel + Services 244
Personal Care Products 66
Food +apparel overage %5= 50
Miscellaneous 235

Grand total= 4,333

there is also health expense $60/person but not sure I am allowed to use that, it would mean an additional 240 for another grand total of 4,573

Is this the figure that I will be held to on sched J? 4333 or 4573?

Can I add the following expenses, or are they covered under the above (like miscellaneous-- what's that?)

entertainment, newspapers 75
homeowners and auto insurance 366
flood insurance 68
property tax 283
i assume car payments are included in the above
AAA membership 10
pet supplies 20
presents 25
vitamins 20
parking at work 40
haircuts 20
work lunches 70
adult exercise membership 79 (for two adults, but this is just the price for one, afraid double will look too much)
children's gymnastics 65
professional dues and memberships 20 (professor)
professional books and subscriptions 100 (professor)

are any of the above not allowable? the numbers too high or low? am I missing anything? are some of these things included in the idea of standards?

i did not include gasoline, vehicle registration, smog checks because I assume it's in the standards.

i did not include the 2 children's violin rental ($60) or violin lessons ($180) because I assume its not allowed. am I wrong?

My mortgage is a couple hundred over the standard, and my food costs are quite a bit over because we eat health food only.

Finally, Am I totally misunderstanding how sched J and national standards works? I have a hunch that my bk court is extremely busy and does things mechanically whenever possible, but I could be wrong.

I think I just screwed up my families life by not understanding everything and not being on the ball. Any help is much appreciated. Getting desparate.
Also, severe lack of reciepts due to not having any money to spend.

sleeplessly yours,

MMP

[SMinGA]

National/IRS standards are for means test. If you're under median, you don't have to finish the expense portion of the means test.

You don't use national standards on schedule J - those are just to determine whether or not you pass/fail the means test on a presumption of abuse if you are over median. Put your ACTUAL expenses on J, including items that may not specifically have a place on the means test. Like a reasonable entertainment amount, something for gifts/holidays, etc.

Use your actual mortgage on schedule J.
Yes include insurance for your car on schedule J.
Yes, include home insurance, taxes, etc. on schedule J if they are not included in your mortgage payment.
On schedule J my atty lumped some things together for misc, and then added a page to itemize those things. My examples for this included cell phone, kids school lunches & school supplies, pet food/supplies, etc.

[Moneypenny]

Are you sure they dont use national standards on schedule J? How did I get that into my head?

That makes things better if so. Does anyone have any ideas about the level of my expenses (too much, too little, missing things)?

Is it common or uncommon to get an under median ch 7 thrown out because UST doesnt buy your expenses? Is it normal that if you are under median by gross income that you will get discharged in a 7?

[BCA2009]

You do use your actual expenses on schedule J. But keep in mind that not all of your expenses will be allowed. List all of your actual car expenses, but if it is over the "standard amount" you might get challenged. From what my attorney told me, in our district, they won't allow much over the standard for food, but we listed our actual utility expenses which were over the standard and it wasn't challenged.

He also had us list at least as much as the standard amounts for items like medical costs. In your example $240. He said they wouldn't ask for any support on items that were less than the "standard", but might on the the items that were over. so we had copies of our last 12 months of power bills.

We listed private school tuition also, that was 577 per month. But he told us that one might go either way.

So we listed at least the IRS standard amounts for all categories and actual expenses for items that exceeded the "standard amount. You can use your actual mortgage, HOA, insurance, taxes, etc. Even though it is over the standard housing cost.

We had about negative $900 on sched J. The trustee didn't question a single item. I'm not sure if it was because we were so negative he didn't see the point, or if it was because he trusted our attorney. I think it was mainly because he know our attorney was a straight shooter.

I was a littled worried about the private school tuition, but he would have had to challenge some other expenses also to create postive DMI.

I say list all actual expenses and let the trustee challenge you. But within reason. Don't put $1000 country club dues.

Remember this is a going forward budget. Just because you haven't bought any clothes in the last 12 months or went to the dentist, that doesn't mean you can't budget those items going forward.

Good Luck!

[Depressed]

For the means test..

On the ownership cost, my attorney said they don't allow you to use it for vehicles owned outright. - (I know, it doesn't make sense to me either). I'm in the same situation where I'm paying on one vehicle and own the other outright.

I'd asked about this previously on the board and was directed to an IRS webpage that explained it.

[jennordhavn]

You should use your actual expenses on Sched. J. None of your expenses look high to me, including your mortgage, for Sacramento area (I live in the Bay Area and have also lived in Elk Grove/Sac). For Sched. J you should definitely include gas/car reg, etc. Not sure about the violin lessons, but everything else seems ok and in an average range. I went a little high on the food, I think about $100 over the standard, but you should put down what you really spend.

[Moneypenny]

Thanks. That is clearing things up a bit. At least till i get the money for a retainer, it seems like the advice is:

***IRS standards for everything unless you are over, plus any other expenses you can get away with, the more the merrier***

I spend way more than I am claiming here on food. And it does bite that I may not be able to claim much at all for a 15 year old 115K car that could never survive a chapter 13 if i get stuck in one because of it. What can I claim on it? If I haven't happened to have had it fixed recently at a tax-paying mechanic (only an under the table one-- I'm poor!), can I claim anything on repairs?

Could I claim $79 each on exercise membership (yoga) for me and my wife? I was going to go with just 79 for both because it might look better. ps-- I went to yoga at 5am this morning after no sleep last night.

Anyone know about the music lessons? I get it that I should not bet my ch7 on it, for sure.

Thanks so much, It's all really getting to me now. I am really suffering, not sleeping.
MMP

[screentest]

Just a quick note I learned the other day at the attorney consult. When he reviewed my schedules he noted my mortgage payment was significantly lower than it should have been....by almost half. I reported the modified payment I got last year and he said "no dice"...I must include the actual, real payment with principle and tax, insurance etc.

He said the court would not accepts a temporary modification payment as an actual payment because this does not address any principle. This helped my situation significantly in regards to the means test and schedules. This also helped me get some sleep lately.

As stated above, calculate everything that is supposed to be included and see how the numbers look.

[Moneypenny]

Interesting screentest. not sure i understand completely. but i have a related issue:

my BoA third mortgage equity is an interest only payment, and always has been. This of course is a major "savings" on my expenses, which kind of sucks. This seems a different situation than you (its not a modification). But, I also am not paying any principle. Do you think on sched J that might change things as it has for you?

MMp

[music12]

i would think you should be allowed one extra-curricular activity per kid. but i don't know for sure...

[screentest]

I thought this as well. I have an original motgage payment of $3800 a month and this does not include tax or insurance on a balance of 617k. Last year I requested and was given a temporary mortgage modification and interest rate reduction which lowered my interest payment to $1900 a month. This new payment also did not include tax or insurance. This modification is only good for 48 months and then back to the original payment.

The first thing the attorney noticed is my very low payment based on my mortgage balance. I explained the modification situation and he said "cant do it"...I must include the actual payment to include principle in my calculations. This also includes the 2nd that I am also paying interest only on. I had to re-figure the actual payment with the 2nd as well.

These two figures put me so far over the expense curve that a chapter 7 was the only option the attorney would consider. I was $900 negative a month before the new mortgage figures so this makes the picture even more bleak in reality. I hope my poor explanation helps a little.

ST

Interesting screentest. not sure i understand completely. but i have a related issue:

my BoA third mortgage equity is an interest only payment, and always has been. This of course is a major "savings" on my expenses, which kind of sucks. This seems a different situation than you (its not a modification). But, I also am not paying any principle. Do you think on sched J that might change things as it has for you?

MMp