How Does the Currently Monthly Income Work in a Bankruptcy?

Bankruptcy Attorney

You will have to determine what your current monthly income (CMI) is, when you are filing for a Chapter 7 bankruptcy. This is done through what is called a means test. This is what will determine if you even qualify for Chapter 7 bankruptcy relief. Your Dayton bankruptcy attorney will assist you with this.

Income Matters

As part of this means test you need to calculate what your current monthly income is. This is not something that you just take a best guess at. It has to be accurate. To calculate it you must look back over the last six months prior to the date you filed for your bankruptcy. This is referred to as the look back period.

You also have to be very astute at what you include in this income. It must include any money you receive from someone else that assists with household expenses. If you are filing bankruptcy with your spouse then both of your incomes have to be calculated.

Keep in mind income must be included even if it is a tax free income. There are some exclusions however, and again your legal counsel will help you to determine this.

Once you have added up all of the income for the look back period you now need to divide this final figure by 6 to give you your current monthly income amount. Calculating monthly income can get difficult depending on your circumstance. For example, not everyone receives the same amount of income each month. It may be that your legal counsel will have to ask for an interpretation from the courts about your CMI.

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