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Benefit from the Experience of Attorneys Bill and Valerie Sherman Former Assistant Attorney General, Assistant County Attorneys and Magistrate Judge

Does the Bankruptcy Court Consider Future Expenses When Assessing a Case?

Question: I used to live in Texas but I now live in Sandy Springs. I started a technology company in Johns Creek. The company has not been doing well because we lost some big contracts with Apple, UPS, The Cheesecake Factory and Coke. When things were going well financially I bought a BMW, Range Rover and a Bentley. My daughter goes to private school in Connecticut at The Hotchkiss School but she broke up with her boyfriend and is transferring to St. Paul's in New Hampshire. She went to The Westminster Schools here in Atlanta but got expelled due to a prank involving a small animal and toothpaste that should not have happened.

My son moved to Los Angeles to become an actor but I fear he has developed a drug problem because I found what looked like cocaine in his room under his Kurt Cobain poster when he visited a month ago. He goes to parties with Charlie Sheen and got arrested a few weeks ago for possession of pot.

Since I have to file bankruptcy is the trustee going to take into consideration that I need a decent car, my daughter needs an education and I might have to send my son to rehab? I was thinking The Betty Ford Center.

Answer: Under the bankruptcy statute, the trustee takes into consideration bankruptcy filers' expenses. However, if the expenses are seen as unreasonable that can have an effect on your ability to file. While everyone understands that a person needs reliable transportation, children need to be educated and substance abuse problems need to be properly addressed, it is important that these expenses (important as they may be) are reasonable. Generally, reasonableness will be determined by what alternatives are available. For instance, there may be other automobiles that are reliable and that are less expensive; there may be other, comparable educational opportunities that have a lower cost; and there may exist addiction treatment options that are less expensive. As part of our financial assessment for clients, we delve into these and other issues.

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