There are a lot of forms that need to be completed when filing a petition for bankruptcy. Each of these forms are referred to as Schedules and differentiated simply by an alphabetical letter. One form is referred to as the Schedule J and this is used to submit your monthly expenditure.
When submitting your Schedule J, especially if you’re seeking a Chapter 13 bankruptcy, you have to be accurate and realistic. Unrealistic expense items can see the court dismissing your bankruptcy petition for bad faith. One problem that many DIY bankruptcy petitioners encounter is converting expenses to a monthly figure.
Monthly amounts relate to calender months. If you spend $100 per week on food, the monthly amount is not $400 (4 times $100). You need to prorate your expenses – in the example shown, it would be $100 times 52 weeks divided by 12 months which totals $433.33. Some expenses, for example, insurance, may need to be prorated from annual to monthly.
It is in your best interests to be as accurate as possible with your monthly expenditure. To begin with, that expenditure total is used to calculate your monthly disposable income, and that is the amount you will be required to pay to the court each month for the next three years (or longer). Secondly, the trustee and your creditors may quiz you on those expenditure items. You need to be able to show how you reached each item’s total, and how you justify each expenditure.
When preparing to file for bankruptcy, you can save a lot of time and ensure your petition is right by engaging the services of an experienced bankruptcy attorney. They know how much you are allowed to claim for each expenditure item, and what amounts may be questioned by the court. You may be spending $100 each week on food, but the courts may allow, depending on the size of your family, $120 per week. By claiming your full entitlement, you are able to better provide for yourself and your family.
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