How are reasonable living expenses calculated in bankruptcy? 13 Answers as of June 29, 2011

I know there is no set amount, but I have been living above average and want to know what is considered excess and what isn't. For example, do I have to move into a smaller house, sell my european car and motorcycle?

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Benson Law Firm
Benson Law Firm | David Benson
If you file under Chapter 13, you can keep all your stuff. The only question will be how much you'll have to pay monthly to the trustee. If you cannot put together a feasible plan, you'll have some tough decisions to make.
Answer Applies to: Ohio
Replied: 6/29/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
You need to see an experienced bankruptcy attorney. Some of the new ones know about as much a you do about the law and fail to get you the full rights provided under the bankruptcy code. Find one who does chapter 7 and chapter 13 cases. The ones who only do chapter 7 tend to be less knowledgeable about all of what is permitted.
Answer Applies to: California
Replied: 6/28/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
They're usually based on IRS standards according to your area and the size of your family. You should see a lawyer, and not sell anything before that. Much property can be kept in bankruptcy if you do it correctly.
Answer Applies to: Virginia
Replied: 6/28/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
A lot of the things that go into what are "reasonable" living expenses has to do with acting in good faith and using some common sense. Certainly, a trustee is not going to let a Chapter 7 debtor get rid of all his/her credit liabilities and at the same time have a $1,000/month car payment when a $500/month car payment would be more reasonable and that would free of $500 to go toward other creditors.
Answer Applies to: Indiana
Replied: 6/28/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
There is no set idea and each geographical area has different standards for figuring these numbers. You may not necessarily have to give up those assets, but other choices may need to be changed.
Answer Applies to: New Hampshire
Replied: 6/28/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    There are set living expenses in the means test to determine if a person qualifies to file a Chapter 7. Whether a person has to sell assets depends on if there is equity on the asset and if that equity can be protected - which depends on the exemption laws of the state where the bankruptcy is filed.
    Answer Applies to: California
    Replied: 6/28/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    This is why you need a bankruptcy attorney. There are different expenses allowed for different tests in determining eligibility for filing bankruptcy. For example, the means test uses IRS allowed standards for the geographic area. Then there is the current income and expenses test which uses whatever the court determines to be "reasonably necessary".
    Answer Applies to: California
    Replied: 6/28/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Reasonable living expenses are actual expenses for rent or mortgage, food, clothing, medical, car, etc. Normally, you can keep all your ordinary assets in a bankruptcy by claimed exemptions. If all property is not exempt you may want to consider filing chapter 13 so you can keep all your assets.
    Answer Applies to: California
    Replied: 6/28/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    You need to discuss this with an attorney. Normally you can keep everything.
    Answer Applies to: California
    Replied: 6/28/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    It varies from case to case. I ask clients to start with what they are actually spending.
    Answer Applies to: California
    Replied: 6/28/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    It is possible that you will have to make some lifestyle changes. The Trustee will look at a number of factors, including IRS standards for your household size and location, in determining what they believe is reasonable. Ultimately, if there is a challenge, it will be up to the judge to determine if your budget is reasonable or excessive. Talk to your attorney. They should have some idea how the judge and trustee have been viewing these issues in your jurisdiction.
    Answer Applies to: Colorado
    Replied: 6/28/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    The answer varies greatly from Trustee to Trustee and from court to court. You have two choices - you can guess and likely have your case go bad in a hurry. Or you can get an experienced lawyer who will know what will fly and how to word and present it.
    Answer Applies to: Georgia
    Replied: 6/28/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Generally through IRS standards for your county.
    Answer Applies to: California
    Replied: 6/28/2011
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