The Bankruptcy Abuse Prevention and Consumer Protection
Act (BAPCPA) divides people into two classes for purposes of bankruptcy filing eligibility based on current monthly income compared to their state's median family income. Just what does the 'Current monthly income' mean?
For purposes of the BAPCPA, 'current monthly income' is the average income per month over the last six months prior to filing the bankruptcy petition. This income includes income that would not otherwise be taxable. Furthermore, in the case of wages and other income, the gross amount is included, not the net amount from withholdings and other deductions. Amounts that are excluded from this calculation include Social Security benefits (and some other transfer payments like state unemployment insurance) and reparations for victims of terrorism and or war crimes. All other income is included, such as pension benefits, workers compensation, state disability insurance and federal unemployment compensation, to name a few.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
For purposes of the BAPCPA, 'current monthly income' is the average income per month over the last six months prior to filing the bankruptcy petition. This income includes income that would not otherwise be taxable. Furthermore, in the case of wages and other income, the gross amount is included, not the net amount from withholdings and other deductions. Amounts that are excluded from this calculation include Social Security benefits (and some other transfer payments like state unemployment insurance) and reparations for victims of terrorism and or war crimes. All other income is included, such as pension benefits, workers compensation, state disability insurance and federal unemployment compensation, to name a few.
