Why You Shouldn’t Include Credit Card or Personal Loan Debt Payments on Your Schedule J (Expenses)

When you file bankruptcy, you must disclose your income and expenses to the Bankruptcy Court. You disclose your monthly household income on Schedule I and your current household monthly expenses on Schedule J. At the end of Schedule J, you’ll subtract your income from your expenses. This lets the Bankruptcy Court and the trustee know whether you have too much disposable income to qualify for a Chapter 7 bankruptcy.

Having too much disposable income means you have a significant amount of money left over after paying your expenses each month. It also means you probably have enough to pay your creditors at least a portion of the debt you owe. It may signal to the court that you should be in a Chapter 13 bankruptcy instead.

Expenses That Aren’t Listed on Schedule J

Schedule J is essentially a budget for your life after bankruptcy. Since you won’t continue to pay the debts that are discharged in your bankruptcy, don’t list your unsecured debt payments on your Schedule J. This includes credit card debt, medical debts, and payday loans.

You can make sure you haven’t accidentally listed any dischargeable debts on your Schedule J by comparing your expenses there to your list of unsecured debts on your Schedule E/F. You shouldn’t have a monthly expense listed on Schedule J for a debt that’s listed on your Schedule E/F. 

There are two exceptions to this rule: 

1. If you have non-dischargeable debts, such as student loans, child support, or recent tax debts that you have to continue paying, make sure to list these payments on your Schedule J. 
2. If you have a car loan or lease and you want to keep the vehicle, you should include the monthly payment in your expenses. After all, it will continue to be an expense you have to pay each month.

Expenses That Are Listed on Schedule J

Besides the two exceptions noted above, you won’t list your debt payments on your Schedule J, but you need to make sure to list all your other monthly expenses so the court gets a complete picture of your post-bankruptcy budget. This includes, but isn’t limited to:

• Your housing payment (rent or mortgage)
• Monthly bills for utilities, gas, telephone, and water
• Groceries
• Car and home maintenance expenses
• Childcare
• Clothing 

Basically, you’ll list the money you spend just to live each month on Schedule J. Review your expenses thoroughly to make sure that you haven’t missed any. If you see that you have too much income left over after excluding your debt payments, carefully review your list of monthly expenses. It’s easy to miss expenses you pay annually instead of monthly. For example, if you bought new tires in January, you should spread out the payment over the 12 months.

Most people who file Chapter 7 bankruptcy don’t have enough income left over each month for their daily living expenses. If after revisiting your monthly expenses you still have a lot of money left over, consider speaking with a bankruptcy lawyer to go over your options. A bankruptcy lawyer can review your expenses to make sure that you haven’t missed any important expenses. They’ll also be able to tell you if Chapter 13 may be a better option for you.