Your income and expenses (budget) are a big part of this, as disposable income is a consideration in filing a chapter 7 vs a chapter 13.
Your budget will look through all of your reasonable and necessary expenses, which usually fall into the following categories: Mortgage/rent, insurance, real estate taxes, home maintenance and up keep, condominium or HOA dues, utilities (including streaming services), food, children’s expenses, clothing, personal care products and services, medical and dental, transportation costs, entertainment, charitable contributions, insurances including health/vehicle/life, car payments, support payments, pet expenses, student loans, tax payment plans, and work expenses. This list is most of the categories, but you may have other reasonable and necessary expenses that your attorney may add.
When working through your budget you and your attorney will keep in mind it is future looking. For example, if currently you only spend $100 a month on food because your budget is so tight paying your unsecured creditors monthly payments, after the case is filed you may be able to spend $400 a month on food.
When going through your budget your attorney should be able to tell you if something is not reasonable and necessary. For example, having a vacation budget would not be reasonable and necessary when going through bankruptcy. There are also allowable national standards that can be used in your case. For instance, currently the national standard for food for two people is $779.
If you have any questions regarding bankruptcy and your budget, visit www.lifebacklaw.com to speak with an attorney today. You will be glad you did!