What is "current monthly income" in a bankruptcy case?

Anyone who is considering filing for bankruptcy is probably all too aware of their current financial state. However, when it comes to personal bankruptcy, there are various terms concerning one's income that are used during the bankruptcy process. A Southaven bankruptcy attorney can offer legal advice regarding Chapter 7 or Chapter 13 bankruptcy, the two types of individual bankruptcy commonly available to local residents.

A bankruptcy attorney will be of help in explaining the numerous terms used in individual bankruptcy cases. One of these terms is "current monthly income," which has a specific definition under the bankruptcy code. In short, this definition is more particular than simply the debtor's most recent monthly take-home pay. Current monthly income in personal bankruptcy means the average of the debtor's monthly income over the most recent six-month period - the six months prior to the beginning of the bankruptcy case.

The current monthly income definition includes income from the debtor's spouse if the petition is a joint bankruptcy petition. In addition, it includes any regular contributions to the expenses of the household from non-debtors. What some may not know is that the definition does not include income from Social Security, nor does it include income from certain other payments associated with the debtor being the victim of certain crimes.

Addressing one's income during bankruptcy may be difficult, but Chapter 13 or Chapter 7 can provide an avenue for financial recovery to Mississippi debtors. When filing for bankruptcy, though, it's important to know the key terms on the forms that will help offer a fresh financial start. A local bankruptcy lawyer can explain the personal bankruptcy process from start to finish and can also help debtors address their income as it relates to current bankruptcy requirements.

Source: uscourts.gov, "Bankruptcy Basics Glossary," accessed Sept. 7, 2015

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