How to Figure Living Expenses for Bankruptcy
The bankruptcy court looks at your allowable living expenses to determine whether you fall under the means test for a Chapter 7 bankruptcy, or how much you can afford to pay your creditors in a Chapter 13 bankruptcy. You use a national standard calculation for determining your total allowable living expenses. You may be able to add additional expenses that are essential to your day-to-day living, but you need a thorough explanation on the necessity of that particular expense.
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Instructions
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Review your paystubs, receipts and bank statements. Write down your exact income and monthly expenses. Specify whether an expense went towards food, clothing, vehicle payments, maintenance, rent payments, household goods, taxes and medical expenses.
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Check your expenses against the U.S. Trustees Collection Financial Standards. You need your exact household size to determine how much money you are allotted for each expense type.
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Check your local standards for exact allowable figures for your rental payment or mortgage, as well as your car payment and maintenance.
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Subtract the allowable living expenses from your monthly income to determine exactly how much income the court would consider disposable income. If you are entering a Chapter 13 repayment plan, the court may request that you pay your entire disposable income towards your Chapter 13 plan.
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