Schedule I & Schedule J of the Bankruptcy Petition are two of the required schedules in a bankruptcy petition, which is the formal document filed by a debtor to initiate a bankruptcy case. They provide information about the debtor’s income and expenses, respectively, and play a critical role in determining the type and success of a bankruptcy case.
Schedule I, also known as the “Statement of Current Monthly Income,” provides information about the debtor’s average monthly income from all sources, including employment, self-employment, rental income, social security, and pensions. This schedule helps the bankruptcy court determine the debtor’s current monthly income, which is used to calculate their average monthly income over the six months before the bankruptcy filing.
Schedule J, also known as the “Current Monthly Expenses,” provides information about the debtor’s monthly expenses, including housing, food, transportation, utilities, and other essential living expenses. This schedule helps the court determine the debtor’s disposable income, which is the amount of money left over after paying for necessities. The court uses this information to determine whether the debtor is eligible for a Chapter 7 or Chapter 13 bankruptcy and whether they have sufficient income to repay their debts.
In a Chapter 7 bankruptcy, the court evaluates the debtor’s income and expenses to determine if they have any disposable income that can be used to pay their creditors. If the court determines that the debtor does not have any disposable income, their assets will be sold to pay off their debts. If the debtor has a significant amount of disposable income, they may not be eligible for a Chapter 7 bankruptcy and may be required to file a Chapter 13 bankruptcy instead.
In a Chapter 13 bankruptcy, the debtor is required to repay a portion of their debts over a three to five-year period. The court uses the information provided in Schedules I and J to determine the amount of the monthly payment the debtor will be required to make. The court considers the debtor’s income, expenses, and other factors when setting the monthly payment, and the payment must be affordable for the debtor based on their current financial situation.
It is important for debtors to provide accurate and complete information on Schedules I and J, as any inaccuracies can result in the court denying their bankruptcy petition or requiring them to file a different type of bankruptcy. Additionally, the court may require the debtor to attend a hearing to verify the information provided on the schedules and to provide additional documentation to support their claims.
Debtors should keep in mind that Schedules I and J are public records, and the information they provide can be viewed by creditors, the court, and the general public. This information can also be used in determining the debtor’s eligibility for future loans and credit, so it is important to provide accurate and honest information on the schedules.
In conclusion, Schedules I and J are two important schedules in a bankruptcy petition that provide information about the debtor’s income and expenses. The information provided on these schedules plays a critical role in determining the type and success of a bankruptcy case and should be completed with accuracy and honesty.
A local Chicago bankruptcy lawyer can assist you in properly preparing Schedule I & Schedule J of the bankruptcy petition.