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Frequently Overlooked Expenses on Bankruptcy Petitions

In filing for bankruptcy you must provide a clear and detailed outline of your available income to demonstrate that you are filing for bankruptcy in good faith and to demonstrate the amount of available income that could possibly be used to repay any remaining collectible debts. This is primarily done on Schedule I and Schedule J of the bankruptcy petition. The amount of monthly payments in this circumstance is determined by a simple calculation based on your remaining income within the month. The formula in other words appears as follows: (debtors gross income – reasonable and necessary expenses).  Although the formula is simple there are many expenses that are overlooked and forgotten that could increase the amount of monthly payments if not included in your financial affidavit.

How to Prepare Your Financial Affidavits | Expense and Income Schedules (Schedule I and Schedule J):

In filing your financial affidavit and assessing your financial information it is important to have your most current spending information and income information available for analysis. Working with outdated financial information, even those couple of months old, can significantly impact the overall appearance of your analysis. The next step is to think big picture and to list your monthly gross income / yearly gross income and all of your larger big picture expenses. Many individuals go through these steps but fail to then narrow down and look at the smaller picture expenses –this is where important smaller expenses occur that could make a significant impact. A good way to develop smaller expenses and record them in detail is to consult with a financial advisor and or to closely analyze expenses that occur less frequently. Another key to unlocking overlooked expenses is to collect receipts and billing information for several months time prior to filing your case. This collection of financial information can provide you with a current snapshot of what their current expenses are which may differ from their perceived expenses. This method allows for an individual to document their spending patterns down to the penny and can break down the expenses specific to the particular needs / outline. It is not uncommon for individuals after analyzing their “Every Penny Snapshot” to determine that their actual spending habits differ from their generalized estimates and or that they realize that expenses occurred during the snapshot period that were overlooked. The next step is to prepare a budget based off of the account of anticipated expenses to help manage payments and financial recovery in the future.

List of Typical and Frequently Overlooked Expenses on Bankruptcy Petitions:

1) Bank Charges- monthly checking account fees, ATM fees, Overdraft fees, new check orders, online bill-pay fees.
2) Home Office Supplies – computer, printer, toner, ink, paper, software, general office supplies.
3) Telephone Expenses – pre-paid cell phones, Emergency cell phone notifications for seniors or anyone with disability.
4) Tax Return Preparation Fees and other accounting fees.
5) Postage and shipping cost.
6) Work Expenses, including lunch and snacks.
7) Job Hunting Expenses – resumes, mileage, postage, fees, stationary.
8) Ongoing Legal Fees and Cost.
9) Parking, Public Transportation and Tolls
10) Medical / Hospital / Vision / Dental / Specialist / Physical Therapy / Chiropractor / Mental Health Visits.
11) Medical Equipment – canes, crutches, wheelchair, brace, oxygen, batteries for hearing aids and other devices
12) Personal Care – hair care / grooming, weight loss program, beauty/barber shop, gym fees, other personal care membership fees.
13) Dental Hygiene Products – toothpaste, whiteners, brush, floss, mouthwash.
14) Eye Glasses – care and replacement, contact lenses and solutions.
15) Physical Therapy Products – TENS unit, weights, strengthening aids.
16) Non-Prescription Medications – antacids, pain killers, cold / allergy / sinus medication, vitamins.
17) Home Alarm System Maintenance and Fees.
18) Home landscaping and lawn care, lawnmower, trimmer, gas, mulch.
19) Home Maintenance – pressure washing, painting.
20) Home Health – humidifier, neti pot, dehumidifier, general supplies.
21) Pool Care.
22) Vehicle Maintenance – motor vehicle oil changes, car washes, tires, breaks, tire rotation, washer fluid, annual registration cost for motor vehicles, On Star System payments.
23) Child Care – school meals/snack, school uniforms, books and school supplies, musical/ band instrument purchase/rental/repairs/maintenance/tuning/strings etc., clothing alterations, school fees/field trips, before school care, college expenses / dorm / furnishings, fees, books, laundry, boy / girl scouts, music lessons and equipment, dance lessons / recitals / competition fees, dance shoes / dance attire / costumes / makeup, sports participation fees, sport equipment / clothing, children’s allowance, summer camp/ summer activities/ summer babysitter.
24) Pet Care – pet food, veterinary visits, shots, pet grooming and care, pet medications.
25) Clothing Care – dry cleaning, laundering, shoe care.
26) Tithing and Donations – church tithes, charitable donations, office and school contributions / gifts / charity / projects, Christmas, Birthday, Anniversary gifts.
27) Subscriptions- monthly magazines / newspaper, monthly web subscriptions
28) Miscellaneous- alcohol, cigarettes, life insurance, cable television.

Finalizing Your Financial Affidavit:

In finalizing your financial affidavit for your bankruptcy case you will need to consult with an attorney and or a certified financial adviser. There are some expenses that may not be applicable to your financial affidavit that may not be listed as an expense, which is dependent upon the type of bankruptcy filed (Chapter 7, Chapter 11 or Chapter 13) or your particular situation. It is important to consider that this step of your financial planning should be taken prior to the filing of the bankruptcy case as this ensures that all creditors are accounted for. A bankruptcy is a type of legal pursuit in which you must be prepared for and have all possibilities accounted for prior to filing your case.

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