When you file Chapter 7, you include a budget – Schedules I and J – which show your income and expenses.   As of the time you file, presumably, your budget shows zero left over as “disposable income.”   If you have more that a nominal amount of disposable income, then your Chapter 7 trustee will object and you will need to either amend your budget or convert to Chapter 13.

Further, Bankruptcy Code Section 521(a)(1)(B)(vi) requires you to include on Schedule I (where you list your income) “a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition.”  In other words, if you know for certain that a new job is about to be offered to you, you must reveal that fact in your petition.  Otherwise  you and your attorney should discuss the meaning of “reasonably anticipated increase in income” prior to filing.

What happens if your income or expense information changes significantly after you file Chapter 7 – what should you do?

Responsibility to Amend Your Budget

The Bankruptcy Code requires you to file a budget that is accurate as of the instant that you file.   The Code also provides that debtors have an affirmative burden to provide information to the Chapter 7 trustee that will allow the trustee to properly administer the estate.  This means that if your financial situation changes more than nominally prior to the close of your case (usually about 5 months after filing), you should advise your lawyer and assist him in preparing an amended budget.

If your amended budget documents significant disposable income you may not be eligible for a Chapter 7 discharge and you will need to convert to Chapter 13 and use that disposable income to repay creditors.

If your amended budget shows that your expenses now exceed your take home pay, your discharge will not be in jeopardy but your right to reaffirm a secured debt could be.  You can only reaffirm secured accounts if  your budget shows that you have sufficient funds to pay the monthly loan payment.

Your attorney is your best source of information about filing original and amended schedules.


Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need bankruptcy protection. Call him at 770-393-4985 for a confidential discussion.

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