It may impact your case is a few ways. If you are in a chapter 7, disposable income is examined to see if you have anything left over at the end of the month to pay to your creditors. If you are in a chapter 13 case, your disposable income is looked at to determine if you can afford your chapter 13 payments.
To get disposable income you look at your income then subtract expenses. For income, deductions are taken out. For example, insurance, taxes, union dues, retirement contributions, retirement loans, domestic support payments, etc. Typically an average is used for income. If you are new to your job, you may need to use an estimate. For expenses, all reasonable and necessary expenses can be added into your budget. These may include, food, clothing, utilities, housing, personal care, transportation, vehicle payment or payments, entertainment, charitable contributions, insurances, miscellaneous categories like pet expenses, and others.
There are payments that are usually not considered reasonable and necessary. For example, recreational items like trailers or watercrafts, depending on their primary use, may not be. Payments for a cabin or second non-rental property, again depending on the primary use, may not be as well.
Your attorney will work with you on calculating your disposable income. They will help you determine if your expenses are reasonable and necessary and if they are not. Visit www.kainscott.com to speak with an attorney today. You will be glad you did!