Don’t forget to list each and every monthly expense you incur when preparing your bankruptcy schedules, on the mistaken belief that you need to show the bankruptcy court that you are living as frugally as possible and thus “deserve” a bankruptcy.  Doing so can cause several issues in your bankruptcy case.

Several times each month, our Nebraska bankruptcy attorneys are on the telephone with a bankruptcy client, reviewing the monthly budget expense schedule to find expenses that have been omitted by the clients in preparation of their monthly budget.  Nebraska Bankruptcy filers that leave out expenses on their Schedule J not only could be committing perjury, but they risk losing their eligibility to file a Chapter 7 bankruptcy if those bankruptcy schedules show that the debtors possess significant disposable income, with which to fund a much more expensive Chapter 13 bankruptcy plan.  Our belief is that our clients sometimes leave out certain expenses because they are embarrassed to list them, but more likely they want to try to demonstrate to the Court that they really need a Chapter 7 bankruptcy to obtain a fresh start on life.  We have found that some of the places to look for those missing expenses are in the following places:

  1. Food expense – Can a family of this size eat healthy food for the entire month at the listed amount (not the dollar menu at McDonald’s or Burger King)?
  2. Housekeeping and cleaning supplies – Have you included the estimated cost for cleaning supplies, lawn care, etc.?
  3. Personal care – Are items that one usually buys at Wal-mart, such as toiletries, haircuts, and other items usually purchased at Wal-mart or Pamida, listed?
  4. Replacement – Is there an estimated cost to replace soft goods, such as linens, appliances, etc.?
  5. Home repairs – Is there budgeted expenses for necessary monthly repairs, such as paint, plumber, electrician, etc.?
  6. Health care – What health needs and dental care have been postponed to repay creditors on that judgment or via garnishment?
  7. Vacations and reasonable gifts – Does the monthly budget provide for reasonable, not extravagant, birthday and Christmas gifts and at least a day or two of vacation?
  8. Transportation – Does the budget provide for repairs, maintenance such as oil changes and tires as well as gasoline?
  9. Non-dischargeable claims – Is there a monthly budget item for debts which will survive the bankruptcy, such as certain income tax debt or student loans?
  10. Retirement – Does the monthly budget provide for some retirement wage deduction?
  11. Current year taxes – Is there enough money budgeted to pay the current year’s taxes, such as income and property taxes?
  12. Cost of moving – If the client will be surrendering a home in the bankruptcy, does the monthly budget provide for the estimated cost to move and pay for a rental deposit?
  13. Pet care – Don’t forget to list not only the cost of buying the dog or cat food, but also the cost of grooming, veterinary care, and de-wormer/flea medication.
  14. Tobacco – Don’t be embarrassed to list your monthly cigarette or chewing tobacco expense.

 

Please note that the list of expenses on Schedule J is not exclusive.  You do not need to live a bleak lifestyle in order to qualify for a Chapter 7 bankruptcy.  Your goal should be to list a monthly budget which includes real-world costs to demonstrate your cost of living after the bankruptcy. Call our Nebraska bankruptcy lawyers at 308-872-8327 if you have questions about filing for bankruptcy.

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