21 Aug What is calculated in “gross income” for the Means Test
When Congress passed the ‘new’ bankruptcy law in 2005, it included a provision that Debtors must prepare and file what is called the Means Test. It looks at all of your income from every source except Social Security benefits. If your income exceeds a certain amount (less allowed expenses) a presumption arises and you are not eligible to file a Chapter 7. Income includes unemployment benefits, sale of property, rental income, retirement benefits, bonuses, commissions, and severance pay. Also, if you are attempting to calculate your own Means Test, you must use your Gross Income – not your Net Income.
Just remember ALL INCOME FROM EVERY SOURCE – except Social Security benefits is counted.
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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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