The basic definition of your current monthly income Chapter 7 is that it is your average monthly income over the six months preceding the filing of your chapter 7 bankruptcy. In other words, we are talking about your average income over the six months immediately prior to your bankruptcy filing. We wrote on Tuesday about why your Current Monthly Income is important to your Chapter 7 Bankruptcy, so check out that article if you are looking for more information on the relevance of your Current Monthly Income Chapter 7.
First, to calculate your Current Monthly Income Chapter 7, you add together all of your gross income for the past six months (gross income means your income before taxes and deductions were taken out). Second, you must add in any additional money that you received, such as: interest on savings/checking accounts, rent on rental properties, pension or retirement income, child or spousal support, unemployment compensation, workers’ comp benefits, or state disability insurance payments. Third, when you have added together all of your gross income that you have received for the past six months including any addition income that you have received, you divide that total number by six to get your current monthly income chapter 7. This is the number that you can use to compare your current monthly income chapter 7 to North Carolina’s median income.
Example of Calculating Current Monthly Income Chapter 7
You file for Chapter 7 Bankruptcy on April 1st. Your gross income from your job is:
- December-$5,000 (received bonus),
- November-$2,500 and
First, add all of your gross income above, which equals $17,500.
Second, add in any additional money you made during that period (let’s assume you made $0).
Divide $17,500 by six, which equals $2,916. This means that your Current Monthly Income Chapter 7 is $2,916.
If you have any questions about calculating your income, or about filing a North Carolina Bankruptcy, please feel free to call us for a free consultation or free phone call at (888) 820-5885 or complete our contact form on this page.