The term "current monthly income" refers to the average monthly earnings from all sources that an individual or couple receives. This calculation is made over a six-month period leading up to the filing of a bankruptcy case. It includes income that is not necessarily taxable and is relevant for determining eligibility for bankruptcy relief under U.S. law.
Current monthly income is primarily used in bankruptcy proceedings to assess a debtor's financial situation. It plays a crucial role in determining whether an individual qualifies for Chapter 7 or Chapter 13 bankruptcy. Legal practitioners often utilize this term when preparing bankruptcy petitions and schedules, ensuring that all income sources are accurately reported. Users can manage their filings with the help of templates and forms provided by services like US Legal Forms.
Here are a couple of examples of abatement:
Example 1: A single parent earns $2,000 per month from their job and receives $500 monthly in child support. Their current monthly income would be $2,500.
Example 2: A couple filing jointly has a combined income of $4,000 from employment and $1,000 from rental properties. Their current monthly income would be $5,000.
The definition of current monthly income is outlined in the U.S. Bankruptcy Code, specifically under 11 U.S.C. § 101. This section establishes the criteria for calculating income for bankruptcy purposes.
| Term | Definition | Difference |
|---|---|---|
| Disposable Income | Income available after necessary expenses. | Current monthly income includes all income sources, while disposable income deducts expenses. |
| Gross Income | Total income before taxes and deductions. | Current monthly income may include non-taxable sources, while gross income does not. |
If you are considering bankruptcy, it's important to accurately calculate your current monthly income. Gather documentation of all income sources over the past six months. You may find it helpful to use legal form templates from US Legal Forms to assist with your filing. If your situation is complex, consulting a legal professional is advisable.
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It includes all sources of income received regularly, excluding certain benefits like Social Security.