How to file Bankruptcy – #10 in a series – “Other Necessary Expenses”

20 Mar How to file Bankruptcy – #10 in a series – “Other Necessary Expenses”

The Means Test is so much fun when you are filing for bankruptcy. Last time, we talked about mechanical amounts, are allowances, which can be deducted from income under the means test. You don’t need to look at your own records or spending to figure out allowances in most cases. However, that’s not the case with a lot of other categories of expenses.

Your lawyer ought to ask you for a lot of paperwork and proof when filing your bankruptcy case. If he didn’t, he’s not doing his job. Why? Well, check out the types of items which can and should be deducted from your income in deciding whether you pass or fail the means test:

  • Taxes
  • Retirement contributions (but only non-voluntary)
  • Union dues
  • Uniform costs
  • Education for employment
  • Non-public education expenses for physically or mentally challenged child
  • Child care
  • Health expenses (not included in health insurance)
  • Necessary telecommunication expense beyond basic telephone or cell phone service
  • Health insurance
  • Disability Insurance
  • Health Savings Accounts
  • Care for elderly, disabled, chronically ill person
  • Energy costs in excess of national average
  • School costs not to exceed $137.50/month per child for children under 18
  • Food and clothing expense, if proven, in excess of allowances
  • Continued charitable contributions

This sounds rather generous. But you need to prove everything. You need records for at least your past 6 months. You’ll have to average this out and prove that your expenses are reasonable.

There, don’t you feel better already? You’ve almost finished half of your means test!

Well, at least you can start to see what it is you’re paying for when you hire a bankruptcy attorney

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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