New Bankruptcy Law Secrets
Qualifying Income for Chapter 7 Bankruptcy
Under the old law the
most recent monthly income was the only income figure the court needed. But under the new
bankruptcy law the CMI (Current Monthly Income) is determined over a six month period.
That's the only figure the court can use.
You take your last six months incomes, add them together and divide by six. The CMI is the average of your last six month's income.
This helps to avoid an old tactic - filing at the start of a month when the debtor's income is expected to be lower than usual.
If your income varies (this is often the case with sales or other commission employees), you should take this into consideration. If you receive a once a year bonus or commission check, you may want to file seven months later or earlier.
Or
if you've recently lost your job and are unemployed or in bad health, you might want to
wait several months until your average income has fallen to the point you can qualify for
the chapter 7 bankruptcy.
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