What is considered income for bankruptcy?

“Current monthly income” is defined as the debtors’ average monthly income from all sources (including non-taxable sources) derived during the 6-month period preceding the date of determination. [§101(10A)(A)]
6 month period. Income is calculated from the 6 month period ending on the last day of the calendar month immediately preceding the date of the commencement of the case, unless the debtor did not file the schedule of current income required by section 521(a)(1)(B)(ii). If that schedule was not filed, income is to be calculated from the 6 month period ending on the date on which current income is determined by the court. [§101(10A)(A)]
Excluded from income. “Current monthly income” does not include security benefits, payments to victims of war crimes, international terrorism, or domestic terrorism. [§101(10A)(B)]
Spouse’s income in non-joint cases. The income which will be compared to the median income in the state will include income of a non-filing spouse, unless the spouses are legally separated or living separate and the debtor files a statement under penalty of perjury. [§707(b)(7)] A non-filing spouse’s income is not specifically included in the Means Test itself. [§707(b)(2)(A)(i)]
Problem for self employed debtors. The definition for “current monthly income” does not make any special reference to self employment or other business income. While any reasonable definition of income from a business would reference the net income remaining after deducting the expenses of producing the income, we can find no provision for that calculation in the bankruptcy code as amended. The expenses which the amended code allows to be deducted has no specific provision for self employment either, but section 707(b)(2)(B)(i) allows adjustments for “such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.”


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