Current monthly income in the means test

What is current monthly income in bankruptcy?

Current monthly income is a defined term under paragraph (10A) of 11 U.S.C. § 101. It begins with the average monthly income from all sources that you receive during the statutory lookback period. In a joint case, the definition covers income received by both debtors.

The statute says income is considered without regard to whether it is taxable. That makes the definition broader than taxable income, but it is not simply a label for gross wages. The same provision adds certain amounts paid by another entity toward household expenses and removes several specified types of payments.

This definition is therefore a sequence, not a single paycheck number: identify amounts received during the lookback, include qualifying household-expense contributions, apply the statutory exclusions, and calculate the monthly average. The resulting figure can differ from what you earn now, what reaches your bank account, or what appears as taxable income on a return.

How does the 6-month lookback work?

When the required current-income schedule is filed, the statutory period ends on the last day of the calendar month immediately before the bankruptcy case begins (11 U.S.C. § 101). The filing month is therefore outside the ordinary lookback. The period covers the preceding 6 months.

Official Form 122A-1 illustrates the rule with a filing on September 15. In that example, the period runs from March 1 through August 31. If income varied, the form instructs the filer to add the income for all 6 months and divide the total by 6 (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

Because the calculation uses completed calendar months, “current” does not mean today or the most recent pay period. The months inside the calculation move when the filing month changes. If the required current-income schedule is not filed, the statute instead uses the date on which the court determines current income for purposes of the Bankruptcy Code.

• Identify the 6 completed calendar months in the statutory window.
• Determine the income received during each of those months.
• Apply the inclusion and exclusion rules in 11 U.S.C. § 101.
• Add the included amounts and divide the total by 6.

What income counts in the means-test calculation?

The starting rule covers average monthly income from all sources that you receive, without regard to whether the income is taxable (11 U.S.C. § 101). Official Form 122A-1 lists gross wages, salary, tips, bonuses, overtime, and commissions before payroll deductions. It also provides separate lines for alimony and maintenance and for amounts regularly paid from another source (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

Those form categories help organize the calculation, but the statute controls the definition. A payment does not fall outside the starting rule merely because it is nontaxable. Conversely, a payment that appears to be income may still fall within one of the statute’s express exclusions.

The form also warns against counting the same amount twice. For example, when both spouses own the same rental property, its income goes in one column rather than both. The calculation should reflect amounts received during the lookback after applying the definition’s additions and exclusions.

• Income from all sources is the statutory starting point.
• Taxability does not decide whether an amount enters the starting calculation.
• Gross employment income is reported before payroll deductions on Official Form 122A-1.
• The same income amount should not be counted more than once.

Do payments from another person or entity count?

Some payments count even when they are not your wages and do not come from a joint filer. The definition includes any amount paid by an entity other than the debtor on a regular basis for the household expenses of the debtor or the debtor’s dependents (11 U.S.C. § 101). In a joint case, the rule also addresses household expenses of the debtor’s spouse when that spouse is not otherwise a dependent.

The key features stated in the statute are regularity and use for household expenses. The rule is not written as a general instruction to count every gift or every isolated payment from another person. It specifically reaches qualifying amounts regularly paid toward the covered household expenses.

Official Form 122A-1 gives these amounts their own place in the income calculation. Married filers also answer questions about filing status and complete the columns the form directs them to use. These household-contribution rules are part of the statutory definition and should not be replaced with a shortcut based only on whose name appears on a paycheck.

• The payer may be a person or another type of entity.
• The payment must be made on a regular basis.
• The payment must be for covered household expenses.
• The rule is separate from the treatment of income received in a joint case.

What payments are expressly excluded?

The Bankruptcy Code removes several categories from current monthly income. The exclusions are part of the definition itself, so they must be applied after identifying amounts received and qualifying household contributions (11 U.S.C. § 101).

Benefits received under the Social Security Act are excluded. The statute also excludes payments made to victims of war crimes or crimes against humanity because of their victim status, along with payments made to victims of international or domestic terrorism because of that status.

A further exclusion covers specified monthly compensation, pensions, pay, annuities, or allowances under titles 10, 37, or 38 when connected with a uniformed-service member’s disability, combat-related injury or disability, or death. The provision contains a specific limitation for certain retired pay under chapter 61 of title 10. Because that limitation depends on the statutory wording, a broad label such as “military income” is not a reliable substitute for checking the precise category of payment.

How is current monthly income used in Chapter 7 and Chapter 13?

Current monthly income supplies an input for forms used in both Chapter 7 and Chapter 13, but the later calculations serve different purposes. Chapter 7 uses Form 122A-1 and, when required, Form 122A-2. Chapter 13 uses Form 122C-1 and Form 122C-2 (Bankr. D. Mass. official guidance — Statements of Monthly Income (Means Test, Disposable Income & CMI)).

In Chapter 7, 11 U.S.C. § 707 uses current monthly income in the statutory inquiry into whether relief would be presumed abusive after allowed deductions and the other required calculations. The income figure alone is not the complete statutory calculation.

Chapter 13 forms use current monthly income in calculating the applicable commitment period and disposable income. State law does not supply a different definition of current monthly income, although published median-income comparisons use amounts tied to the applicable state and household size. E.D. Mo. L.R. 1007-1 describes those published medians as Census amounts made available through the court and the Office of the United States Trustee. State-specific information belongs on the state hub.

What mistakes can distort the calculation?

One common mistake is treating current monthly income as your latest wage or take-home pay. The statute instead uses an average over a completed 6-month period and disregards whether income is taxable. Official Form 122A-1 reports employment income before payroll deductions (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

Another mistake is counting only money paid directly by an employer. Regular amounts another entity pays toward covered household expenses are part of the definition. The opposite error is counting every outside payment without asking whether it was regular and used for the household expenses identified by the statute.

A third mistake is overlooking the express exclusions. Social Security Act benefits and the other listed victim and uniformed-service payments are not included merely because they were received during the lookback. Finally, the form cautions against double counting. The sound approach is to apply each part of 11 U.S.C. § 101 in order rather than relying on a shortcut such as gross income, taxable income, or present income.

• Do not substitute today’s earnings for the statutory average.
• Do not use taxability as the test for inclusion.
• Do not omit qualifying regular household-expense contributions.
• Do not overlook the express statutory exclusions.
• Do not report the same income twice.

Frequently asked questions

Is current monthly income the same as gross income?

No. Gross employment income is one part of the calculation, but current monthly income is a broader statutory definition. It starts with average monthly income received from all sources, regardless of taxability, adds qualifying regular household-expense contributions from another entity, and removes the express exclusions listed in 11 U.S.C. § 101.

Does the month I file count in the 6-month average?

Ordinarily, no. When the required current-income schedule is filed, the statutory period ends on the last day of the calendar month immediately before the case begins. Official Form 122A-1 illustrates that a September 15 filing uses March 1 through August 31 (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

Does nontaxable income count?

Taxability does not control the starting calculation. The definition covers income received from all sources without regard to whether it is taxable (11 U.S.C. § 101). An amount may still be excluded if it falls within one of the statute’s express exclusions, including Social Security Act benefits and certain victim or uniformed-service payments.

Do regular contributions toward my household expenses count?

They can fall within the statutory definition. Current monthly income includes amounts another entity regularly pays for the household expenses of the debtor or the debtor’s dependents (11 U.S.C. § 101). The statutory wording focuses on both regular payment and household use, rather than treating every isolated payment or gift the same way.

Are Social Security benefits included?

No. Benefits received under the Social Security Act are expressly excluded from current monthly income by 11 U.S.C. § 101. The same definition contains separate exclusions for specified payments to certain crime or terrorism victims and for specified payments connected with a uniformed-service member’s disability, combat-related injury or disability, or death.

What if my income changed during the lookback period?

The calculation still averages the income received during the statutory window. Official Form 122A-1 directs filers whose monthly income varied to add the income for all 6 months and divide the total by 6 (Bankr. E.D. La. official guidance — Chapter 7 Form Packet). That average may differ from the income received in the latest month.

Is current monthly income calculated differently by state?

The definition comes from federal bankruptcy law rather than a separate state definition. State and household size matter when the resulting figure is compared with published median family income. E.D. Mo. L.R. 1007-1 describes those medians as Census amounts made available through the court and the Office of the United States Trustee.

Sources

• 11 U.S.C. § 101 — Definitions · official source
• 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
• Bankr. E.D. La. official guidance — Chapter 7 Form Packet
• Bankr. D. Mass. official guidance — Statements of Monthly Income (Means Test, Disposable Income & CMI)
• E.D. Mo. L.R. 1007-1

Related

• The means test, explained
• Chapter 7
• Chapter 13
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