Bankruptcy or credit counselor?

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Dear Bankruptcy Adviser,
How do I find reliable individuals or companies to give accurate information on whether to file bankruptcy or see a credit counselor, and thereby provide good information on the best way to go?
— Coleman

Dear Coleman,
I wish such a company existed. Unfortunately, I think that the average consumer would be too skeptical to hire such a company. I have been thinking about exactly this type of service because I agree, one should have an unbiased, third-party assessment of his or her financial situation.

I have prepared a basic, but helpful breakdown to let you see what service may best suit you. While I cannot ask you specific questions that may affect your options, completing this information will give you some guidance.

The problem at this point is that I do not know about your assets. However, at the very least you can see whether you have money leftover for credit counseling, Chapter 7 or Chapter 13 bankruptcy.

Fill in the blanks with your specific numbers. I have included the numbers that bankruptcy attorneys and credit counselors use for certain expenses. These numbers are generally accepted payments for certain items. If any one item is higher, remember that you may not be allowed to pay anything above what the court would consider reasonable and necessary for your support.

I would not be an attorney if I did not say: This is only for general guidance. Without a complete and thorough consultation, I cannot confirm whether you qualify for bankruptcy or credit counseling.

Monthly expenses
Mortgage/rent payment
Utilities (gas, electric, trash, etc.)
Cell phone (per phone) $55.00
Cable TV $75.00
Internet $30.00
Home phone $75.00
($250 per person/$150 each additional person in household)
($75 per person/$50 each additional person in household)
Laundry/dry cleaning $35.00
Medical/dental expenses
(outside of employer covered costs)
Transportation (gas, car maintenance)
Charitable contributions
(now facing more scrutiny by bankruptcy judges)
Auto insurance
Life insurance
(amount paid in addition to employer coverage)
Health insurance
(amount paid in addition to employer coverage)
Property insurance (if applicable)
Back taxes (federal or state)
Car payment
(in bankruptcy, anything above $400/month will be scrutinized as potentially excessive)
Alimony, support payments
Payments for dependents not living in your home
($50 per person, $25 for each additional household member)
Personal care/grooming
($35 per person, $20 for each additional household member)
Child care
Student loan payment
Net monthly income (take-home income)
Subtract total monthly expenses

Please note, there are MANY EXCEPTIONS that only a consultation could determine. However, this will give you a general idea as to what I ask a prospective client before determining whether he or she qualifies for bankruptcy. Most cases will have some unique issue regarding one or more of the above expenses. Use this as a starting point in your personal exploration of all your options.

Justin Harelik is a practicing attorney in Los Angeles. To ask a question of the Bankruptcy Adviser go to the “Ask the Experts” page, and select “bankruptcy” as the topic.