Official Form 106J-2 - Schedule J-2: Expenses for Separate Household of Debtor 2

Official Form 106J-2 — Schedule J-2: Expenses for Separate Household of Debtor 2

Worksheet for Preparing Official Bankruptcy Form 106J-2 (12/15)

IMPORTANT: This is a preparation worksheet only. It is NOT the official form. All information must be transferred to Official Form 106J-2 or entered into e-filing software before filing with the court. This form is used ONLY when Debtor 1 and Debtor 2 in a joint bankruptcy case maintain separate households. Do NOT duplicate expenses already reported on Schedule J (Form 106J).

COURT HEADER

UNITED STATES BANKRUPTCY COURT

FOR THE [________________________________] DISTRICT OF [________________________________]

Filing Status

☐ This is the initial filing of Schedule J-2
☐ This is an amended filing of Schedule J-2
☐ This is a supplement showing postpetition Chapter 13 expenses as of date: [__/__/____]

WHEN TO USE THIS FORM

Schedule J-2 must be completed when ALL of the following conditions are met:

1. ☐ The case is a joint case (both Debtor 1 and Debtor 2 are filing together)
2. ☐ Debtor 1 and Debtor 2 maintain separate households (i.e., they do not live together)
3. ☐ Debtor 2 has household expenses that are NOT already reported on Schedule J (Form 106J)

If Debtor 1 and Debtor 2 live together, do NOT use this form. Report all household expenses on Schedule J only.

If both debtors share some expenses, report the shared expenses on Schedule J and only the separate expenses of Debtor 2's household on this Schedule J-2.

PART 1: DESCRIBE DEBTOR 2'S SEPARATE HOUSEHOLD

Line 1: Confirmation of Separate Households

Do Debtor 1 and Debtor 2 maintain separate households?

☐ No — STOP. Do not complete this form. Report all expenses on Schedule J.
☐ Yes — Continue with this form.

Line 2: Dependents of Debtor 2

Does Debtor 2 have dependents?

☐ No
☐ Yes — List all dependents below:

IMPORTANT (Fed. R. Bankr. P. 9037): Do NOT state the names of minor children. List only the relationship and age. If Debtor 1 and Debtor 2 have dependents in common, list those dependents on BOTH Schedule J and Schedule J-2.

Line 3: Non-Debtor Household Members

Do the expenses listed on this form include expenses of persons other than Debtor 2 and Debtor 2's dependents?

☐ No
☐ Yes — Describe: [________________________________]

Debtor 2 Separate Household Address

Reason for Separate Household

Briefly explain why Debtor 1 and Debtor 2 maintain separate households:

[________________________________]

(Examples: separation pending divorce, military deployment, employment in different cities, caring for elderly relative, etc.)

PART 2: DEBTOR 2 SEPARATE HOUSEHOLD MONTHLY EXPENSES

Instructions: List only the average monthly expenses for Debtor 2's separate household. Do NOT include any expenses already reported on Schedule J (Form 106J). Estimate expenses as of the bankruptcy filing date, unless this form is being used as a post-petition supplement in a Chapter 13 case.

HOUSING EXPENSES

UTILITIES

FOOD AND HOUSEHOLD

CHILDCARE AND EDUCATION

PERSONAL EXPENSES

MEDICAL AND DENTAL

TRANSPORTATION

RECREATION AND CONTRIBUTIONS

INSURANCE (NOT DEDUCTED FROM WAGES)

TAXES (NOT DEDUCTED FROM WAGES OR INCLUDED ABOVE)

INSTALLMENT AND LEASE PAYMENTS

SUPPORT OBLIGATIONS

OTHER REAL PROPERTY EXPENSES

List expenses for real property owned by Debtor 2 OTHER than the primary residence listed in Line 4.

OTHER EXPENSES

PART 2 (CONTINUED): TOTALS AND CROSS-REFERENCE

Line 22: Total Separate Household Expenses

TOTAL monthly expenses for Debtor 2's separate household (sum of all lines above):

$[________________________________]

CROSS-REFERENCE: Copy this total to Schedule J (Form 106J), Line 22b.

Expense Summary

PART 3: ANTICIPATED CHANGES IN EXPENSES

Do you expect Debtor 2's separate household expenses to increase or decrease within the next year after filing?

☐ No — No changes are anticipated.
☐ Yes — Explain the anticipated changes:

(Examples: lease expiration, child aging out of daycare, anticipated job relocation, end of alimony obligation, scheduled medical procedure, etc.)

DECLARATION AND SIGNATURE

Under penalty of perjury, I declare that the information provided in this Schedule J-2 is true and correct to the best of my knowledge.

I understand that making a false statement, concealing property, or otherwise committing bankruptcy fraud is a serious crime punishable by fine, imprisonment, or both under 18 U.S.C. § 152 and 18 U.S.C. § 3571.

Signature of Debtor 2: ________________________________   Date: [__/__/____]

Printed Name of Debtor 2: [________________________________]

Note: Both Debtor 1 and Debtor 2 sign the Declaration About an Individual Debtor's Schedules (Official Form 106Dec), which covers all schedules including this one.

PRACTITIONER NOTES AND PRACTICE TIPS

When Schedule J-2 Is Required

• This form is used exclusively in joint cases where the two debtors maintain separate households
• Common scenarios include: legal separation pending divorce, spouses living apart due to employment, military deployment, or caring for family members in different locations
• If the debtors share a household, all expenses are reported on Schedule J alone

Relationship to Schedule J

• Schedule J (Form 106J) reports the expenses of Debtor 1's household (or the joint household if both debtors live together)
• When Schedule J-2 is used, the total from Line 22 of Schedule J-2 must be entered on Line 22b of Schedule J
• Schedule J then computes the combined net income by subtracting both Schedule J expenses and Schedule J-2 expenses from the combined income on Schedule I

Impact on Means Test

• The separate household expenses reported on J-2 do NOT directly flow into the Chapter 7 means test (Form 122A-2), which uses IRS standards and standardized allowances
• However, in Chapter 13, the actual expenses from both Schedule J and Schedule J-2 are used to determine disposable income under 11 U.S.C. § 1325(b)
• Courts may scrutinize the reasonableness of claimed expenses, especially where maintaining two households significantly reduces disposable income

Amended and Supplemental Filings

• If expenses change significantly after filing, an amended Schedule J-2 should be filed
• In Chapter 13 cases, a supplemental Schedule J-2 may be required to show current post-petition expenses as of a specified date
• Always check the box at the top of the form indicating whether this is an initial, amended, or supplemental filing

Documentation Best Practices

• Maintain receipts, bank statements, and bills to substantiate each expense category
• The trustee may request documentation of any expense claimed on this form
• Expenses that appear unusually high or low compared to IRS standards may trigger additional scrutiny

Shared Expenses Between Households

• If both debtors share a particular expense (e.g., health insurance covering both), report the expense on only ONE schedule — either Schedule J or Schedule J-2 — not both
• For dependents in common, list those dependents on both Schedule J and Schedule J-2, but allocate the expense for that dependent to only one schedule
• Document how shared expenses are allocated between the two households

COMMON PITFALLS AND ERRORS

1. Duplicating expenses on both Schedule J and Schedule J-2 — This is the most common error. Each expense should appear on ONLY one schedule. If Debtor 1 pays an expense for both households, list it on Schedule J. If Debtor 2 pays it separately, list it on Schedule J-2.

2. Using J-2 when both debtors share a household — If the debtors live together, J-2 should not be filed. All expenses should be on Schedule J.

3. Failing to copy the total to Schedule J, Line 22b — The J-2 total must be entered on Schedule J so the court can calculate the combined net disposable income.

4. Not listing dependents in common on both schedules — Children or other dependents shared between the households must be listed on both Schedule J and Schedule J-2, even though the expense is allocated to only one.

5. Including payroll-deducted expenses — Insurance premiums, taxes, and retirement contributions already deducted from wages (shown on Schedule I) should NOT be included on Schedule J-2 unless they are paid separately from Debtor 2's take-home pay.

6. Omitting the reason for separate households — Courts expect an explanation of why the debtors maintain separate households. This is particularly important because maintaining two households increases total expenses and reduces disposable income available to creditors.

7. Not filing an amendment when circumstances change — If Debtor 2 moves, reconciles with Debtor 1, or has a significant change in expenses, an amended schedule should be filed.

8. Inconsistency with Schedule I — The expenses on J-2 should be reasonable in light of Debtor 2's income as reported on Schedule I. If expenses exceed income, be prepared to explain the source of funding.

9. Rounding errors — Ensure that all line items sum correctly to the total on Line 22. Mathematical errors may trigger a notice of deficiency or trustee inquiry.

10. Not accounting for post-petition changes in Chapter 13 — In Chapter 13 cases, changes in Debtor 2's expenses may affect plan feasibility. File supplemental schedules as needed and notify the trustee of material changes.

STATE-SPECIFIC VARIATION NOTES

Schedule J-2 is a federal form used uniformly across all bankruptcy courts. However, the following state-specific factors may be relevant:

California (CA)

• California community property rules (Cal. Fam. Code § 760) may complicate expense allocation between separate households during legal separation
• California courts in the Central District may require additional local forms or attachments documenting the separation
• Community property obligations may create shared liability for certain household expenses even when debtors maintain separate residences

Texas (TX)

• Texas community property law (Tex. Fam. Code § 3.002) may affect how expenses are allocated between separate households
• Texas courts may require evidence of a separate household arrangement (lease agreement, utility bills in Debtor 2's name)
• The Texas homestead exemption applies to each debtor's separate household, which may affect the property schedules

Florida (FL)

• Florida is not a community property state, which generally simplifies expense allocation between separate households
• Florida courts may require additional documentation in cases where the debtors claim the homestead exemption for two properties
• Florida Statute § 61.075 (equitable distribution in divorce) may affect how expenses are allocated during pending divorce proceedings

New York (NY)

• New York courts follow equitable distribution rules (N.Y. Dom. Rel. Law § 236(B)), which may affect expense allocation
• Southern District of New York local rules may require separate declarations supporting the necessity of maintaining two households
• High housing costs in New York City and surrounding areas may make Schedule J-2 amounts appear elevated compared to national norms — trustees are generally aware of regional cost differences

FILING INSTRUCTIONS

Step 1: Determine Whether Schedule J-2 Is Needed

☐ Confirm this is a joint case
☐ Confirm Debtor 1 and Debtor 2 maintain separate households
☐ Confirm that Debtor 2 has expenses not reported on Schedule J

Step 2: Gather Documentation for Debtor 2's Expenses

☐ Collect recent utility bills for Debtor 2's separate residence
☐ Gather lease agreement or mortgage statement for Debtor 2's housing
☐ Compile insurance premium statements
☐ Collect vehicle loan or lease agreements
☐ Gather medical expense records
☐ Document any support obligations (court orders for alimony/child support)
☐ Compile other recurring expense documentation

Step 3: Complete the Form

☐ Transfer all expense information from this worksheet to Official Form 106J-2
☐ Verify all calculations — line items must sum to Line 22 total
☐ Copy the Line 22 total to Schedule J (Form 106J), Line 22b
☐ Ensure the combined Schedule J / Schedule J-2 calculation on Schedule J is correct
☐ Check for duplicate expenses between Schedule J and Schedule J-2

Step 4: File with the Court

☐ File Schedule J-2 as part of the complete schedule package (within 14 days of the petition, or with the petition if possible)
☐ File electronically through CM/ECF if required
☐ Retain copies for your records
☐ Provide copies to the Chapter 13 trustee if applicable

Step 5: Post-Filing Monitoring

☐ Monitor for changes in Debtor 2's expenses
☐ File amended Schedule J-2 if material changes occur
☐ In Chapter 13, file supplemental Schedule J-2 as directed by the court or trustee
☐ Be prepared to provide documentation of expenses at the § 341 meeting

SOURCES AND REFERENCES

• Official Form 106J-2 (12/15): U.S. Courts — Schedule J-2
• Official Form 106J-2 PDF: U.S. Courts PDF
• Official Form 106J (Schedule J): U.S. Courts — Schedule J
• 11 U.S.C. § 521 (Debtor's Duties): U.S. Code
• 11 U.S.C. § 302 (Joint Cases): U.S. Code
• 11 U.S.C. § 1325(b) (Disposable Income in Ch. 13): U.S. Code
• Fed. R. Bankr. P. 1007 (Lists, Schedules, Statements): LII — Cornell Law
• NextChapter — Schedule J Instructions: NextChapter Help Center
• Bankruptcy Forms Index: U.S. Courts