Monday, August 15, 2011

What are schedules I and J in a bankruptcy petition

If you pass the Means Test, the next question is whether you qualify under Schedules I (Income) and J (Expenses). Schedules I and J measure your actual income and expenses but totally disregard any expenses you will get rid of in the bankruptcy. All income counts. Child support counts. Social Security income counts. Unemployment income counts (but not in the means test). Profits you make from your business count but not the gross income of the business. All income counts. Not all expenses count.

 You are not allowed to have too high a budget for discretionary items like recreation. You can tithe up to 10% of your income to churches or give it to charities. Your grocery bill on Schedule J is often less than it actually is. Clothing expenses are limited. What isn’t limited are medical expenses, health insurance, car insurance, and other necessities. Most people actually have more expenses than income to cover them when Schedules I and J are done.

You also want to look at the assets you are allowed to keep to see what you may have to give up to your creditors. Most people can exempt everything they own but check my website at to see a list of items you are allowed to keep in Virginia and West Virginia.

Also, remember bankruptcy consultations are free at the Law Firm of Marilyn Solomon.

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