Your
Budget
The formula to determine your budget in bankruptcy is simply your net household
income minus your necessary expenses. Most consumers
are very close to even at the end of the month, that
is their expenses balance out their income and the amount
left over is close to $0 or even a negative number. In
this case, chapter 7 is a perfectly acceptable option.
For the consumer with money left over at the end of the
month, chapter 13 is necessary. Although the process
of chapter 13 is longer, and there is usually at least
a nominal repayment of creditors, the goal is the same.
The discharge. Consumers should be aware that the court
has certain guidelines for expenses that have been accepted
as "reasonable," any amount over the reasonable amount may be viewed with skepticism by the bankruptcy
trustee and backup documentation may be required.
Disposable
Income
The concept of disposable income is one most consumers are familiar with,
it's the money left after necessary expenses are paid
including home mortgage or rent, utilities, transportation
expenses, insurance, food, laundry and clothing expenses,
child care, and anything else you just wouldn't be able
to get by without. The money left after those necessary
expenses are paid is you disposable income. Many consumers
have little or no disposable income, but those who do
have the ability to fund a chapter 13 plan can take advantage
of all the bankruptcy laws have to offer, such as the
re-valuation of secured assets, or the "super-discharge."
If you need help with filing bankruptcy, please Contact a Bankruptcy Lawyer to assist and determine your budget in bankruptcy.
