Bankruptcy Schedules Look Forward and Backward

means testNew bankruptcy lawyers are often frustrated by the  internal inconsistencies required by the “reformed” Bankruptcy Code.

Whether it’s rational or not, the means test income figure looks backward while the  means  test expenses set forth are prospective.

Some of those prospective expenses are actual (taxes ) while others are contractual (mortgage payments).

Social Security income is excluded from the means test, but included on schedule I.

Schedule I and J look forward.  The immediate future may or may not match or even  be consistent with the look back period.

Once you accept that the income and expense numbers in different places reflect different “realities” and serve different statutory purposes, the frustration (at some levels) subsides.

Where those numbers tell different stories, make sure that the two stories can be reconciled;  new job, no job;  cure arrears, surrender property.

Inquiring minds will want to know.


  1. Christine Holdeman says

    I recently joined this email list. This weeks email on the backwards / forwards looking of the Means test and Schedule I/J was right on point. I have gotten to the point that I understand the rules and it is beginning to make sense as to the legal purpose for the rules as well.
    This weeks EMAIL was particularly good at explaining this concept.

    ALSO: I have been mentored by Cathy for a few months now and she is just outstanding. It is often hard for a super-experienced trainer to get back to the basics and explain them but Cathy is a natural for this.

    Good luck to other newbies from a BK newbie.

  2. Christine is a quick study as well. She and her associates got me started trying to mentor the newly fledged and helped me realize how much overview of bankruptcy I take for granted at this stage of my career, stuff that isn’t always obvious or even written down somewhere.