Most bankruptcies take some time; they are never an instant process. In some cases, substantial accounting and financing need to be done in order to make determinations regarding the dismissal of debts or the reorganization plans for a debtor. One of these calculations includes listing all of the reasonable expenses that a debtor has on a monthly basis. The sum of this calculation will then be deducted from the average income of the debtor over the past six months in order to create a final determination regarding the amount of disposable income a debtor has after paying expenses and debts.
Examples of Reasonable Expenses
Every person will have different types of reasonable expenses that they include for their bankruptcy calculations. However, you may be curious regarding what types of expenses may be included in your reasonable expenses calculations. Some examples of reasonable expenses may include clothing, your mortgage payment, your rent payment, food, health insurance, life insurance, car insurance, internet services, employment expenses, property taxes, union dues, cell phone expenses, expenses related to your children, transportation expenses, child support payments, or spousal support payments ordered by a court.
IRS Deductions
If you are genuinely interested in how much you can claim as reasonable expenses in your bankruptcy documents, you can look at what the Internal Revenue Service calculates as reasonable expenses for a family of your size. In some cases, this may be easier than attempting to personally itemize every single one of your own expenses. While calculating your reasonable expenses individually will give you a more accurate amount, using the Internal Revenue Service calculations can actually benefit certain debtors in some cases.
Examples of Unreasonable Expenses
While you may have a regular expense occurring monthly, this does not mean that it rises to the level of a reasonable expense recognized by a bankruptcy court. For example, hiring a dog walker, food delivery services, or subscription boxes that you receive on a monthly basis will likely not be considered within reasonable expenses for bankruptcy purposes. Additionally, any lavish expenses such as vacations or expensive shopping trips will also likely not be included within reasonable expenses for bankruptcy. In order to understand better what types of reasonable expenses will be allowed in your bankruptcy case, you can look to national standards for allowable living expenses, as well as local standards for housing, utilities, and transportation expenses. While you may have additional amounts included in your reasonable expenses regarding these debts, knowing what the national and local standards are can help you determine whether or not your reasonable expenses will be considered appropriate by a bankruptcy court Trustee.
Contact an Experienced Bankruptcy Attorney Today
If you are considering filing for bankruptcy, you will have to go through the process of determining your reasonable expenses for your financial calculations. Consider visiting with an experienced bankruptcy attorney so that your legal and financial rights are protected. Contact the experienced family law attorneys today at Lankford & Moore Law today. We would welcome the opportunity to help you with your bankruptcy case.
