Schedule J of the official bankruptcy forms is critical for consumer debtors, because it is where they report all their household expenses, from mortgage payments to mousetraps. This, in turn, determines if there is anything left over after the end of the month (don’t laugh), when then decides if you qualify for Chapter 7 or 13, and for the latter, how much you pay the trustee every month. Pretty critical stuff.
So when Schedule J changed a couple of days ago, I decided to look it over for what lawyers love to call “traps for the unwary.”
Here’s a little one: there are two lines (4c and 20d) asking about home upkeep expenses. Don’t get caught double-dipping, or a trustee might threaten to throw you out of Chapter 7 and have you make Chapter 13 payments instead!
To be fair to the form writers, the instructions for line 20 tells you to exclude “real property expenses included on lines 4 or 5,” but in practice it will probably be an easy enough mistake to make (even for a bankruptcy law firm!) in the heat of battle.
As an aside, I find among my clients that home repairs and even ordinary maintenance expenses are woefully under-estimated. Even renters have lots of legitimate ones! Think before you file on all that you have to spend on a home and a yard, and even an apartment, and you can save big if you have to go to bankruptcy court.
By Doug Beaton