If you’re a debtor filing for Chapter 13 bankruptcy you will be required to take a means test to determine if there is enough disposable income to fund a Chapter 13 bankruptcy. During Chapter 13 bankruptcy, a debtor will be required to fill out a B22 form which will generate a budget, with expense categories — housing, food, clothing, transportation etc. Each expense category is given a dollar figure by the IRS and they are not generous by any stretch of the imagination.

For example, the IRS says that you should not spend more than $1,500 per month for housing; but many Dallas-Fort Worth residents spend well over that. What happens if you spend more than what the IRS says you should be spending? Well, let’s say you’re spending $3,000 a month for a mortgage and the IRS only allots you $1500…well, that extra $1500 may be made available to creditors, even though you need it for your housing.

This is why it is so important for any debtor considering Chapter 13 bankruptcy to sit down with their attorney and review their expenses and compare it to what is allowable by the IRS/B22 form used in the bankruptcy means test. If you’re spending too much in a certain category and not enough in another, you may want to shift some of those expenses around before you file for Chapter 13 bankruptcy.