19 Mar How to file bankruptcy #9 of a series – Allowances
So we’re still looking at that creation of Congress – lovingly known as form B22A.
Once we calculate your “current monthly income” and we compare it to the “applicable median income”, we know whether your chapter 7 case is presumed abusive.
You can overcome the presumption of abuse if you have enough expenses to leave you with insufficient disposable income to fund a chapter 13 plan.
Today, we discuss “allowances.” Here are some allowances you can use to reduce from your income:
- an allowance depending on how many family members you have
- additional allowances if you have a family member over 65 years of age
- housing and utilities – non-mortgage expense – per local standards in IRS manual
- average monthly mortgage payment (no double dipping here against the allowance above)
- vehicle operation expense
- public transportation expense (if you actually use it)
- vehicle ownership costs (local standards) (some courts think this applies only if you have a car with a lien on it and then make you reduce your monthly car payment – other courts disagree) (think you can figure this out without a lawyer??)
These are fixed expenses for the most part – your mortgage payment is the only item here which might be variable. Think you’re done? Hardly. Once we figure out allowances, we next have to consider deductions.
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