Household income has a broad definition in determining what type of bankruptcy you qualify for. The bankruptcy means test looks at traditional income you receive from an employer through paychecks. This will include any bonuses and overtime that you receive. If you are married, it will also include any income earned by your spouse, even if they do not plan to file a bankruptcy.
With the means test, even one-off sources of income, such as lottery or gambling winnings will count towards your total income. The means test will NOT include Social Security or VA benefits as income. But, it is safe to assume that almost any other source of income will count. This includes alimony or child support, self-employment, or even household income contributions from friends or family members. It will also include pension and retirement income.
In addition to the means test, you must also submit a schedule I in any bankruptcy petition. This schedule must show all types of income, including Social Security and VA benefits, in addition to everything else mentioned above. If you want to file a chapter 7 bankruptcy, you will not be able to show any money left over in your monthly budget. So, it will be important to show almost every expense that you can.
While the means test looks back at the six months before filing, Schedule I looks at your actual current income. Both forms will be considered in determining whether or not you can file chapter 7 bankruptcy. Be prepared to be able to show your income in both scenarios to your bankruptcy attorney.
If you have questions about whether or not you will qualify for chapter 7 or chapter 13 bankruptcy, feel free to set up a free consultation to discuss your situation. Call us at 412-414-9366 to set up an appointment.
Determining if your income and expenses will allow you to file bankruptcy can oftentimes be very confusing and frustrating. I’ve been filing cases for over 10 years, and would be happy to discuss your situation given all my experience with filing hundreds of bankruptcy cases.