New Bankruptcy Laws Monthly Living Expense
How the new bankruptcy laws incorporate a criminal standard used by the IRS
IRS National Standards for determination of living allowances is measured based on all living expenses, less costs of housing. All people are permitted to use their current housing cost, plus a standardized amount for all other expenses. By way of example, consider that Section 707(b)(2)(A)(ii)(I) provides the following standard of living:
- One person earning less than $830 per month is permitted monthly living expenses of $344, plus actual housing cost.
- Two people who earn a combined total of $2500 per month, are allowed monthly expenditures of $716, and current housing expense.
- A three person household is assigned $982 per month living expenses if currently earning $5,200 a month, plus actual housing payments.
The schedule above was not originally intended to determine living expense standards absent a criminal conviction for tax evasion. New bankruptcy laws incorporate these standards by reference, applied universally, without judicial discretion, to all individuals who file. The new bankruptcy laws are expected to become law at any time.