Schedule J

[Cali]

ITA!

I would be reluctant to file 7 with a net income close to enough to support a 13 payment plan.

[dragonnfly]

Make sure you remember also that its OK to be negative on Schedule J. We are -1088. Forseeing them picking on a few things.....at that they are doing.

[Cali]

We were negative too.

Make sure you remember also that its OK to be negative on Schedule J. We are -1088. Forseeing them picking on a few things.....at that they are doing.

[laurannm]

Even if the tuition is not in excess of the IRS standards you will be asked to explain why this expense is reasonable and necessary if the UST reviews your case. We didn't get shot down on transportation, childcare or medical - just had to show receipts and explain how we came up with the figure we did. You are awfully close on schedule J - I agree with Phillyman that your budget even seems a little conservative for a family of 5. If the private school is religious, you may want to consider add something under charitable giving. Up to 15% is allowed, 10% is the usual amount people tithe... Even if you didn't do this in the months prior to BK it is an allowable expense. It is good for tax purposes as well, especially if there's a chance you'll have to pay taxes on any debt write-off. I would be reluctant to file 7 with a net income close to enough to support a 13 payment plan.

Right now we are slightly negative. I talked to my lawyer about the charitable giving...we did give some to the school directly and to the church, but I have zero documentation to back that up. He didn't think it would be an issue but I'm not sure.

The take-home pay I mentioned in my OP already had auto insurance and life insurance deducted.

I forgot to also mention diapers, which with twin girls is running us about $60 a month (outside of the $50 in other non-food items). I need to go back and review my non-food items because I think I under-estimated that expense.

One thing I forgot to mention too...my take home-pay that I quoted originally was using my actual tax liability, based on last year's tax returns. Still not 100% sure if I shoul dbe using that same number on my Schedule I - Payroll Deductions line or should I just plug in what I have withheld from my check, even though I typically get a refund. I'll have to check with my attorney

What do they consider enough to fund a Ch 13 plan...is it around $100 still?

[Phillymanhere]

Wow Laura,

Reading this thread is really informative and helpful to me. I'm pretty sure you could probably get the school and/or church to give you a note indicating you gave such and such in 2007 or 2008. It takes nothing out of their hide, and they know people sometimes need receipts for taxes and record-keeping (that'll be why they think you're asking).

I'm thinking that you and your DH need to make sure you have a good story--one you can confidently tell--about why your children really have to go to private school. You should be able to tell a good, compelling story that is also truthful. That's the key--you have to really believe it and it needs to be truthful even if it emphasizes a certain aspect and leaves out another aspect. Whenever I've had to do this, I really have to practice to get the wording down. It helps to say this out loud until you can feel it come confidently out of you. I'm thinking your lawyer will help with this as well.

As far the income and chapter 13 question, from what I can tell reading on this board, the $100 figure is a good figure. It lowers the chance you'll be pushed to consider a 13. But ... the U.S. Trustee apparently can always challenge your/our numbers. That's the one thing I've really picked up here--there is always an exception ... all these rules we give here ($100, 70 days, 90 days, etc.) are just a broad tendency ... in any individual case, the way the law is interpreted can and will be different (and unpredictable).

I've got to start keeping records on everything I spend. I guess I didn't realize how much I needed to do that until I read this thread and the responses. Sounds you'll be really really ready!

[laurannm]

Wow Laura,

Reading this thread is really informative and helpful to me. I'm pretty sure you could probably get the school and/or church to give you a note indicating you gave such and such in 2007 or 2008. It takes nothing out of their hide, and they know people sometimes need receipts for taxes and record-keeping (that'll be why they think you're asking).

I'm thinking that you and your DH need to make sure you have a good story--one you can confidently tell--about why your children really have to go to private school. You should be able to tell a good, compelling story that is also truthful. That's the key--you have to really believe it and it needs to be truthful even if it emphasizes a certain aspect and leaves out another aspect. Whenever I've had to do this, I really have to practice to get the wording down. It helps to say this out loud until you can feel it come confidently out of you. I'm thinking your lawyer will help with this as well.

As far the income and chapter 13 question, from what I can tell reading on this board, the $100 figure is a good figure. It lowers the chance you'll be pushed to consider a 13. But ... the U.S. Trustee apparently can always challenge your/our numbers. That's the one thing I've really picked up here--there is always an exception ... all these rules we give here ($100, 70 days, 90 days, etc.) are just a broad tendency ... in any individual case, the way the law is interpreted can and will be different (and unpredictable).

I've got to start keeping records on everything I spend. I guess I didn't realize how much I needed to do that until I read this thread and the responses. Sounds you'll be really really ready!

Glad you have found it to be informative...the responses have from everyone have been helpful to me.

I am sure we can come up with a compelling and religion-based justification to our tuition expense. I'm wondering if they will really question that though..I mean the BK code spefically mentions allowing up to $1500 per child for tuition.

Our record keeping up until a few months ago has been non-existant to be honest. Granted, we use our debit card everything so we always have bank statements but have never kept receipts.

[Cali]

We have been using our debit for everything and we only have our bank statements.

Our record keeping up until a few months ago has been non-existant to be honest. Granted, we use our debit card everything so we always have bank statements but have never kept receipts.

[laurannm]

We have been using our debit for everything and we only have our bank statements.

The only problem with this I think (at least maybe for us anyways) is that our bank statements for example will show a $50 purchase at Target. However, that purchase may have been $25 for clothes and $25 for personal hygiene stuff. So the statements really won't show the details...but maybe that won't matter, not sure

[Cali]

According to my attorney, they just want to see where you spent the money at and how much was spent.

The only problem with this I think (at least maybe for us anyways) is that our bank statements for example will show a $50 purchase at Target. However, that purchase may have been $25 for clothes and $25 for personal hygiene stuff. So the statements really won't show the details...but maybe that won't matter, not sure

[Help!]

A little more on the private school tuition... Laurannm, look for test scores (ITBS, state) posted on your private school's website (or ask the office) and compare them to your local public schools. These may help you to feel confident about your explanation as to why tuition is a "reasonable and necessary" expense.

Even if you have nothing for documentation for charitable giving, it is not unreasonable to include as an expense on J and the means test. There is an interesting subtlety on the means test as far as charitable contributions. Everything else is what you HAVE done in the 6 months prior to filing, but the exact wording for the charitable contributions expense on the means test is "the amount you WILL continue to contribute". That's not to say you wouldn't be asked for documentation about the past, but how would you have made those contributions in the months prior to filing when you were struggling to cover expenses? Taken a cash advance on a credit card and put the cash in the collection basket? I don't think so.

Also, make sure you're using the current IRS standards (BestCase may be using the old standards - they went up in March:

http://www.irs.gov/businesses/small/article/0,,id=104627,00.html

[laurannm]

A little more on the private school tuition... Laurannm, look for test scores (ITBS, state) posted on your private school's website (or ask the office) and compare them to your local public schools. These may help you to feel confident about your explanation as to why tuition is a "reasonable and necessary" expense.

Even if you have nothing for documentation for charitable giving, it is not unreasonable to include as an expense on J and the means test. There is an interesting subtlety on the means test as far as charitable contributions. Everything else is what you HAVE done in the 6 months prior to filing, but the exact wording for the charitable contributions expense on the means test is "the amount you WILL continue to contribute". That's not to say you wouldn't be asked for documentation about the past, but how would you have made those contributions in the months prior to filing when you were struggling to cover expenses? Taken a cash advance on a credit card and put the cash in the collection basket? I don't think so.

Also, make sure you're using the current IRS standards (BestCase may be using the old standards - they went up in March:

http://www.irs.gov/businesses/small/...104627,00.html

[Help!]

That's exactly what I thought. I understood that the amount in excess would be questioned, but I still had to explain why *any* private school tuition was reasonable and necessary. Here's the exact wording on the UST request for documentation: "If you are asserting special circumstances necessitating private schooling, please explain and document".

[laurannm]

That's exactly what I thought. I understood that the amount in excess would be questioned, but I still had to explain why *any* private school tuition was reasonable and necessary. Here's the exact wording on the UST request for documentation: "If you are asserting special circumstances necessitating private schooling, please explain and document".

You had mentioned (I think) that your tuition expense was above the standards, so perhaps that is why they are asking for an explanation? In other words maybe if your expense was at or below standard, they wouldn't bother asking for the documentation. Just a guess though

What were you planning on using for reasoning...the test scores?

[Cali]

My attorney told us it was a good thing our kids were in public school now, because they would in fact question why we had them in private school. So I think it doesn't matter if you are above or below, if the UST wants to know why they will ask.

Just make sure you have all your ducks in a row and you will hopefully be fine.

[Help!]

It was odd... I was asked about the amount above the standards in one question, and then why it was necessary at all in another. We have a child with well-documented special needs, so I don't think we need to go into test scores. In the absence of that documentation, I'd have those test scores printed and ready to go.