Where’s the line for tobacco on the new schedule J?

John Wayne SmokingNews flash: the new schedule J bankruptcy form doesn’t have any place for debtors to declare how much they spend on tobacco products per month.

Full disclosure: the old Schedule J didn’t either.

So smokers (and chewers, I suppose), where do you account for the financial damage for this habit?

Under “Food and housekeeping supplies?” Even the dedicated chewers generally don’t eat the stuff.

Under “Personal care products and services?” Doesn’t sound right either.

And definitely not under “medical care,” I would bet.

There’s always “Other: specify:” on line 21, and I that’s where I usually put significant tobacco expenses.

So why does it matter? In a chapter 7 case, debtors want to make sure they spend all their income, so the trustee doesn’t force them into a chapter 13 payment plan.

Left open is the question of whether a trustee would consider it an abuse if a debtor would have positive income of say $500 per month if it wasn’t for their $600 smoking habit. I haven’t seen a case like that, but its within the realm of possibility.

Even though one of my best friends in law school is a anti-tobacco crusader nowadays instead of a practicing lawyer, and we all know that the evil weed did in John Wayne and countless others, tobacco still is a legal product for adults to consume, and shouldn’t preclude Chapter 7 bankruptcy.

As for those folks who are purposefully in Chapter 13 and needing to make monthly trustee payments, an accurate assessment of actual monthly expenses is critical, as they don’t want to be left short at the each of each month due to habits that are stealthily consuming income.

I guess the take-away is “don’t let your bankruptcy case go up in smoke!”

By Doug Beaton

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