Current Monthly Income: Why Is It Important in My Chapter 7 Bankruptcy?

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Current monthly income is important to determine early in your Chapter 7 bankruptcy process because it is a crucial element in determining if you qualify to file a Chapter 7 Bankruptcy. This income figure is one of the most important factors your Bankruptcy Attorney will use in deciding if you are likely to succeed on your bankruptcy filing. If your current monthly income is high enough (generally above the median family income of your state), then the Bankruptcy Court Judge may decide that you have the ability to repay your debts (which would either mean your bankruptcy petition is denied or you are required to convert to a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy).

Your Bankruptcy Attorney will initially determine the relationship between your current monthly income and the median family income in North Carolina. If your current monthly income is less than North Carolina’s median family income (which you can look up on the Federal government’s website at, then you most likely are eligible for a Chapter 7 bankruptcy. If your currently monthly income is higher than North Carolina’s median family income, then you will have to complete further calculations (called the “means test”) to determine if you legally are deemed to have the ability to repay your debts.

In our next Chapter 7 Bankruptcy blog post we will discuss how you can calculate what your current monthly income is (for purposes of your bankruptcy filing). For now, the take away you should have from this post is probably what you thought: the Bankruptcy Judge will look at how much money you make monthly and use that to help guide the Judge in determining whether it is appropriate for you to be filing for bankruptcy (or whether the Judge thinks you should just continue trying to pay your debts over time).