San Jose Bankruptcy Attorney Talks About Schedule J
San Jose Bankruptcy Attorney Talks About Schedule J
When filing out a bankruptcy petition, the debtors will fill out “Schedule J” which is lists the debtors’ expenses and calculates their monthly shortfall (or surplus in a Chapter 13). This Schedule is one of the key forms to determine if a person is eligible for a Chapter 7 bankruptcy or how much they have to pay in a Chapter 13 bankruptcy.
Since Schedule J is one of the driving factors in determining if a debtor is eligible for Chapter 7 Bankruptcy or how much to pay in a Chapter 13, there is a huge temptation for debtors to overstate their expenses. By overstating expenses, then the debtors believe they may be helping themselves.
The first problem is that a Schedule J is signed under penalty of perjury. It is illegal to make false statements on the Bankruptcy Petition including the Schedule J. Therefore, the debtors face a huge risk if their expenses are overstated. The debtors should remember that the Bankruptcy courts sees hundred of petitions a month and they can spot an unreasonable number very quickly. Once spotted then the Court will scrutinize the petition much more closely which includes asking for documents proving the high expense amounts. The ramifications can be extremely severe including sanctions.
Second, there are significant negative results on a schedule J with high expenses. For example, a debtor may have a problem keeping their car if the Schedule J is too negative. The Bankruptcy Court may believe that a debtor would not be able to make their payments and would be in default within a year. Under such a scenario, the court would rather the debtor return the car now than go into default later. Losing a car is not worth overstating the debtors; expenses.
If you have questions on properly creating a Bankruptcy Petition, then please call Sagaria Law 408.279.2288 or visit us at www.sagarialaw.com to set up an appointment.
