How Do I Prove My Budget?

The IRS standards are ridiculous. I cannot live on what they say I should live on. How can I convince the Judge otherwise? The best way to help your attorney help you is to gather documentation.

Documentation is your best evidence for presenting your budget to the Court. The means test requirement for filing bankruptcy is based on IRS standards. I found that for the most part the IRS standards are in the ball park of the average family in Kansas City, Missouri except with it comes to the rent allowance.

As of January 1, 2008 the standards are changing yet again. Although the standards for the Kansas City area are increasing it still may not be high enough in order to cover your actual expenses. So what can you do to ensure that you present an accurate budget to the Court?

If you are filing for bankruptcy the first thing I would consider doing is look at the US Trustee’s website to see what the standards are in your area. If the standards are not high enough to cover your actual budget then you will need to provide documentation as to what you really spend. Gather such things as a print out for the past year from: the pharmacy, the utility companies, the doctor, the landlord, etc… I would also keep all receipts for food, gas, clothing, maintenance for the vehicle, public transportation costs, etc… Don’t think that the Court or the trustee will just accept your word as to what your budget is. Documentation is the key to success.

This information gathering will do two things. The first is that it will help you assist your attorney in presenting your case. The second and possibly more important result from this information gathering is that this will show you exactly where you are spending your money. Remember knowledge is power. This knowledge will help you regain financial control.