Part Three: Kinds Of Income Reported In Bankruptcy; What Is Projected Income?

12 May Part Three: Kinds Of Income Reported In Bankruptcy; What Is Projected Income?


Bankruptcy debtors disclose projected income. This is current and/or future income. Of course, no one has a crystal ball to predict the future, but projected income is what someone reasonably believes they will receive in the future. It isn’t just what someone hopes they will get. It is the best estimate of what someone can count on earning, or expect to earn, in the upcoming future.

If someone is unemployed, looking for a job, and hoping they will soon be hired, they might not be able to project an income for a job that doesn’t exist. Projected income may be zero if someone is making nothing now and don’t have a job. Their projected income might be current unemployment income or based upon a part time job they are working until something better comes along.

If someone files bankruptcy and is unemployed, but knows that they will have a job next week, then they might have to show the expected salary as their projected income.

Projected income disclosed in Chapter 7 bankruptcy or Chapter 13 bankruptcy cases is also a true income, however it may not be true based upon historical proof. Some people project income for a job they just accepted, but haven’t started yet.

Some people have income that fluctuates so it isn’t regular. However, they might be reasonably expected to earn the same next year as they did last year. Examples might be a Realtor, someone who works commission, has their own business, or works irregular hours. That type of bankruptcy debtor might determine projected bankruptcy income based upon an average of historical earnings over a period of time. If their business or hours dropped by a percentage, they might project a percentage of the historical average.

Projected income helps the court determine if someone is in a position now, or will be soon, to pay some or all of their debts.

See also: Part One: Kinds Of Income Reported In Bankruptcy; Introduction

See also: Part Two: Kinds Of Income Reported In Bankruptcy; What Is True Income?

See also: Part Four: Kinds Of Income Reported In Bankruptcy; What Is CMI, Also Known As Means Test Income?

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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