E is for Expenses in the Bankruptcy Alphabet. Whenever you file a bankruptcy case, you must submit a list of all of your property, income and expenses. Schedule J of the bankruptcy schedules is where you must list your monthly expenses.

One of the most important tasks for any bankruptcy attorney is to properly inquire into the living expenses of their clients. First, there are the obvious ones, such as rent and mortgage payments and car loans. Then, there are utilities and auto and life insurance. But it soon becomes a lot more complicated when folks have children. What about all of those sports and school activities that your kids do? Hint: they’re usually not free.

Mind you, the Bankruptcy Court is not going to become the “lifestyle police” and tell you that your kids can’t play Little League baseball anymore. Not at all. As long as your personal and family expenses are reasonable, then the Court and the Trustees won’t intervene. But last year, I overheard a debtor (not my case) state under oath that she spent $1,000 on clothes per month just for herself. Well, I could have saved that person the trouble and counselled her that that type of answer wasn’t going to fly.

So, why are your expenses all that important? Because the Bankruptcy Trustees will review your expense lists to determine if you can perhaps afford to enter into a Chapter 13 repayment plan, or perhaps pay even more in your current Chapter 13 plan. So, it’s crucial to prepare correctly and get your expenses right from the beginning.

How about other hidden expenses?

1. A pack-a-day smoker spends at least $150 a month on cigarettes;
2. Do you own a dog and cat? Just to feed them, you’ll spend $50 to $100 a month;
3. Unreimbursed medical expenses might be anywhere from $50 to $500 monthly. I often have clients order a prescription printout from their pharmacy that will itemize all of their costs over the past 3 to 6 months;
4. Car repairs; oil changes; parking expenses