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Debt Management Law News

December 29, 2009

How Does the means test effect your bankruptcy?

What Is Your Current Monthly Income?

We begin to look at the Means Test your bankruptcy attorney must prepare for your case if you are attempting to qualify for the benefits of Chapter 7 bankruptcy. A vital component to the Means Test is the calculation of your Current Monthly Income. In order to determine your Current Monthly Income (CMI), your Houston Bankruptcy Attorney will average certain income that you (and in a joint case, your spouse) received in the six months before your bankruptcy filing.

CMI includes:

1. income from all sources, whether or not taxable, and
2. any amount paid by an entity or person other than you (or your spouse in a joint case) on a regular basis for your household expenses, your dependents, and (in a joint case) your spouse if not otherwise a dependent.

What Must Be Included?

The following types of income will be included in your Current Monthly Income. Additional items may be included depending on the circumstances of your case.

1. Gross wages (before taxes, salary, tips, bonuses, overtime, commissions
2. Income from the operation of a business, profession, or farm.
3. Rent and other real property income
4. Interest, dividends, and royalties.
5. Pension and retirement income.
6. Regular contributions to the household expenses of the debtor or the debtor’s dependents, including child or spousal support.
7. Unemployment compensation.
8. Income from all other sources.

Is Anything Excluded?

The federal Bankruptcy law excludes from your CMI “benefits received under the Social Security Act” and certain payments to victims of terrorism, war crimes, and crimes against humanity.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

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