This is part four in the six-part series on “How to Prepare a Consumer Chapter 7 Bankruptcy without a Nebraska Bankruptcy Attorney”.
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The first article dealt with the Bankruptcy Means Test, one of the most difficult aspects of preparing to file bankruptcy, and the deciding factor on whether one can proceed with a Chapter 7 Bankruptcy.
The second article focused on listing creditors in your Chapter 7 Bankruptcy Petition.
The previous article focused on preparing and listing your property in your Bankruptcy schedules.
This article will provide information on how to complete Schedule I and J, the income and expense section of the Chapter 7 Bankruptcy Petition.
Before I get started, I will once again state that it is not advisable to prepare a consumer bankruptcy petition without the assistance of a Nebraska Bankruptcy Attorney. The information provided in this guide is general information that does not take into account someone’s unique situation or circumstances.
Schedule I-Your Income
Schedule I is a form that lists information about your employment and income. It is broken into different parts:
Part 1-Requests that you include your employment status, occupation, where you work, work address, and how long you have worked there. You are required to include this information for each job you have, whether full, part-time, season, or self-employed.
Part 2-Requests that you list all income you receive on a monthly basis. It is important to understand that this figure is your current monthly income. What you are earning now. Additionally, many people are paid bi-weekly, meaning they get paid every 2 weeks. This does not mean they get paid twice a month. When someone gets paid every 2 weeks, they are paid 26 times in a year, not 24.
- Line 5 requests you list all payroll deductions.
- Line 8 requests you include any other income received, such as rental income, child support or alimony, social security, or other forms of assistance.
- Add them all together to get your combined monthly income.
Schedule J-Your Expenses
In Schedule J you will list your monthly expenses.
Part 1-Requests that you list your dependents, relationship to debtor, age, and whether the dependent lives with you.
Part 2-Has you estimate your monthly expenses:
- In Line 4, you list rent or home ownership expenses, such as your mortgage and property taxes.
- Line 6 deals with utility expenses.
- Line 7 deals with Food and Housekeeping supplies. Food means more than just groceries, but going out to eat, fast food, etc.
- Line 8 deals with child care and education costs.
- Line 9 deals with clothing expenses.
- Line 10 requests you to list your personal care products and services, such as haircuts, massages, etc.
- Line 11 deals with medical and dental expenses not covered by insurance.
- Line 12 deals with transportation expenses such as fuel, oil changes, bus fare, etc. But do not include car payments.
- Line 13 requests that you list your entertainment expenses, such as newspapers, recreational activities, gym fees, etc.
- Line 14 deals with charitable contributions.
- Line 15 has you include your insurance expenses, such as life insurance, auto insurance, health insurance, etc. Do not include these expenses if they have already been deducted elsewhere, like as a payroll deduction.
- Line 16 deals with taxes you pay. Again, do not include taxes that are deducted from your pay or some other tax already deducted, like property taxes in escrow accounts.
- Line 17 deals with your car payments or lease payments on vehicles.
- Line 18 has you list your child support or alimony obligations if they were not deducted from wages.
- Line 19 deals with expenses for dependents who do not live in your home.
- Line 20 requests that you include home-owner expenses for a second home or rental property.
- Line 21 is a catchall where you can include any other type of expense you make monthly that does not fall into the above categories. You will need to specify the expense and how much it is per month.
You are then requested to add up your expenses and subtract them from the income amount you listed in the previous Schedule I. The remaining amount is known as your monthly net income. If you have a negative number as your net income or a rather high positive net income, I would advise speaking with a Nebraska Bankruptcy Attorney about the ramifications of having too high or too low of net income.
In the next article of the series, we’ll discuss the Statement of Financial Affairs. A long form that is difficult to understand and fill out.
If you need help filing for bankruptcy, I would strongly advise you contact a reputable bankruptcy attorney in your area. If you live in Nebraska and think bankruptcy might be something to help you achieve your financial dreams in the future, contact me. You can schedule an appointment online or take a free bankruptcy analysis.