Reporting Your Income When Filing Bankruptcy

Guest post by : Bob Jones

When learning about filing bankruptcy, it's important to have a grasp on how to report your income. It doesn't matter whether you're filing Chapter 7 or Chapter 13 bankruptcy, income is income. When filling out a bankruptcy petition there are three types of income that are required to be listed. These types of income that are required are actual income, projected income and last of all the current monthly income. This is actually one of the changes that the bankruptcy code received in 2005. Prior to the code changes in 2005, the debtor that was filing for bankruptcy was only required to prove their actual income and projected income. At that time, that is what the bankruptcy court used to figure out if an individual is capable of paying back a portion or all of their debts.

When Congress was working out the changes to the bankruptcy code prior to 2005 they felt that actual income and projected income didn't give a true picture of the debtor that was filing bankruptcy. This is how the means test was conceived and added to the BAPCPA of 2005. Calculating the means test is how the debtor will come up with their CMI or current monthly income.

It doesn't matter if the debtor is filing Chapter 7 or Chapter 13 bankruptcy; they will be required to prove their actual income for the two years prior to the bankruptcy filing. Actual income includes all income, meaning any income from your work, investments, gifts and rental property. Technically, this is any money a person received no matter how they got it.

Also required for the debtor to show is their projected income. The projected income is the amount that the debtor can believe they will get in the near future. If the debtor is unemployed under our current job market in the US, it would be safe to say that number would be zero, unless of course they were receiving unemployment which would extend into the future.

Lastly, the debtor is required to figure out their current monthly income. This is figured using the means test, which uses the last six months income, multiplied by two. The debtor will then check the state's median income chart and see if they are under that amount to qualify to file Chapter 7 bankruptcy. This for many can get confusing and should be done with the help of a bankruptcy attorney. It's not written in stone if you don't qualify under the median income chart. There are other parts of the equation that a bankruptcy attorney will be able to figure out. Also included in the formula is comparing income over expenses which in some cases will qualify a debtor that has a higher income.

Bob Jones writes about bankruptcy and debt issues including file personal bankruptcy. For all you need to know about bankruptcy or getting a free bankruptcy evaluation visit
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