In Bankruptcy Questions, todays question

Today’s question is, “what is the maximum income to file Chapter 7?”

There is no maximum income as such. Under the Means Test you are required to compare your annual income to the median income for a family of your size in your county. If you’re below the median, you pass the Means Test and can file Chapter 7. If you’re above the median there is a presumption that you should be in Chapter 13, but you can overcome that presumption.

Your income is based on what is called your Current Monthly Income (CMI). CMI is calculated by taking the average of all income from all sources for the last six months and multiplying that average by 12 to get your annual income. You then compare that to the median.

It’s obvious that calculating income in this way might be misleading. For example, if you had a high paying job until two months ago when you got laid off your average monthly income (CMI) might put you above the median when in fact you are well below the median. You can read more about CMI and the Means Test here.

Recommended Posts

Leave a Comment

Free Consultation

Not readable? Change text.

Start typing and press Enter to search