{"id":25,"date":"2011-09-27T00:12:04","date_gmt":"2011-09-27T00:12:04","guid":{"rendered":"http:\/\/www.fremont-bankruptcy-attorney.com\/blog\/?p=25"},"modified":"2020-03-12T07:10:25","modified_gmt":"2020-03-12T07:10:25","slug":"is-it-important-how-expenses-are-calculated-when-filing-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/2011\/is-it-important-how-expenses-are-calculated-when-filing-bankruptcy\/","title":{"rendered":"Is it Important How Expenses are Calculated When Filing Bankruptcy?"},"content":{"rendered":"

By Ryan C. Wood<\/a><\/p>\n

So you just withdrew $100 from your bank account, and by the end of the day you have $12 left, but you have nothing to show for it.\u00a0 Where did you spend your $88? What did you spend it on?\u00a0 If you\u2019re like most people you probably do not keep perfect records of where your money goes precisely.\u00a0 Most people do not have a clue how much they actually spend on their monthly expenses.\u00a0 If you don\u2019t know how much you\u2019re spending, how do you know how much you should be budgeting?<\/p>\n

When bankruptcy attorneys<\/a> meet with clients during a free bankruptcy consultation most have underestimated their expenses by a quite a bit in certain areas like food and even transportation.\u00a0 After calculating their income and expenses it appears that they have several hundred dollars left over as disposable income which is normally not the case because they are not saving money each month.\u00a0 How much do you spend on food each month?\u00a0 How much do you spend on gas each month?\u00a0 The answer is usually when I am hungry or need food I buy it.\u00a0 If my car needs gas I buy it.\u00a0 What about oil changes and tires?\u00a0 Our clients look at me in surprise if I ask them about the several hundred dollars disposable income.\u00a0 The usually response is, \u201cExtra money?\u00a0 We haven\u2019t had any extra money in years!\u201d\u00a0 So, what happened in their calculations of expenses?\u00a0 This is where the memory lapse normally occurs \u2013 you spent that $88 you withdrew from your bank account and that money went into a black hole.\u00a0 You have to think harder about how you are actually spending your income each month.\u00a0 Most likely it went to items like food, drinks, groceries, and gas.\u00a0 More and more rent is taking a large percentage of monthly net income.\u00a0 Healthcare costs are more and more taking a large percentage of monthly net income too.\u00a0 Most people wouldn\u2019t count that Starbucks drink they get every morning, even though it costs $5.\u00a0 Or that $10 spent on lunch each.\u00a0 Every dollar counts when you are making a budget!\u00a0 You would be surprised by how much those uncounted expenses add up.<\/p>\n

So why is it important to make sure that your expenses are calculated correctly, especially if you are filing bankruptcy?\u00a0 There are several reasons.\u00a0 One of the most important reasons is that when you file for bankruptcy you need to make sure that you are filing in good faith.\u00a0 One of the factors in determining whether you filed your bankruptcy case in good faith is whether there is any money left over after deducting your reasonable and necessary expenses from your monthly income.\u00a0\u00a0 If you do have money left over, especially if it is a significant amount, then the bankruptcy filer has the obligation to pay what they can afford each month to their creditors in a chapter 13 bankruptcy.<\/p>\n

If you are filing a Chapter 13 bankruptcy case, it is even more important that you calculate your expense correctly because you will be in the Chapter 13 plan for 3 to 5 years.\u00a0 If you underestimate your expenses then you may end up paying more than you can afford in your bankruptcy case which can deeply hurt your pocketbook.\u00a0 In order to calculate your expenses correctly not only do you need to know how much you are spending on ordinary household expenses, like mortgage, rent, utilities, etc., you also need to estimate how much you spend on things you don\u2019t pay for every month but shell out thousands when it is necessary.\u00a0 Make your bankruptcy attorneys<\/a> life a little easier by reviewing your bank accounts statements for the last six months prior to a consultation.<\/p>\n

Even if you were not filing a Chapter 13 bankruptcy these budgeting issues are important.\u00a0 You need to know exactly how much you have left over every month after paying all the necessary expenses so that you can come up with a realistic budget \u2013 and be able to stay within that budget \u2013 in order to truly receive the \u201cfresh start\u201d that you deserve.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Ryan C. Wood So you just withdrew $100 from your bank account, and by the end of the day you have $12 left, but you have nothing to show for it.\u00a0 Where did you spend your $88? What did you spend it on?\u00a0 If you\u2019re like most people you probably do not keep perfect […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/25"}],"collection":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/comments?post=25"}],"version-history":[{"count":6,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/25\/revisions"}],"predecessor-version":[{"id":995,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/25\/revisions\/995"}],"wp:attachment":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/media?parent=25"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/categories?post=25"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/tags?post=25"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}