Chapter 7 Statement of Current Monthly Income Preview, Official Bankruptcy Form 122A-1 скачать в хорошем качестве

Chapter 7 Statement of Current Monthly Income Preview, Official Bankruptcy Form 122A-1

The Statement of Current Monthly Income is official known as “Official Form 122A-1” Chapter 7 Statement of Your Current Monthly Income. Every Chapter 7 debtor must file a statement of current monthly income. A better term for this statement would have been average monthly income because this statement reveals the average monthly income from all sources of income during the six full months preceding the petition date. The current monthly income statement must be distinguished from the statement of current income constituting Schedule I, which reveals the actual monthly income as of the petition date. For example, consider a wage-earning doctor who had earned $10,000 per month for each of the six full months preceding the petition date but was fired seven days before filing the petition. That doctor would have current monthly income of $10,000 for Statement of Current Monthly Income purposes but current income of $0 for Schedule I purposes. The means test analysis consists of two separate statements. First is the Statement of Current Monthly Income. The second is the Chapter 7 Means Test Calculation, Official Form 122A-2. Together these documents determine whether the debtor’s income and expenses create a presumption of abuse that may prevent the debtor from obtaining relief from debts under chapter 7 of the Bankruptcy Code. Chapter 7 relief can be denied to a the debtor who has primarily consumer debts if the court finds that the debtor has enough income to repay creditors an amount that, under the Bankruptcy Code, would be a sufficient portion of their claims. The debtor must file the Statement of Current Monthly Income if the debtor is an individual filing for bankruptcy under chapter 7. This form will determine the debtor’s current monthly income and compare whether the debtor’s income is more than the median income for households of the same size in the debtor’s state. If the debtor’s income is not above the median, there is no presumption of abuse and the debtor will not have to complete the companion statement, the Chapter 7 Means Test Calculation, Official Form 122A-2. The Statement of Current Monthly Income focuses on the “median income” of the debtor’s state. So let’s define “median income” and distinguish that from mean or average income. The median income is the income amount that divides a state population into two equal groups, half having an income above that amount, and half having an income below that amount. It may differ from the mean income which is commonly called the average income. The income that occurs most frequently is the income mode. So, again, the focus of the Statement of Current Monthly Income is the “median income.” The debtor’s current monthly income is annualized by multiplying the monthly amount by 12. Remember, the current monthly income for this statement is defined as “the average monthly income from all sources of income during the six full months preceding the petition date”. If the debtor’s annualized current monthly income exceeds the debtor’s median state income, then the debtor must file the companion form, Chapter 7 Means Test Calculation (Official Form 122A –2). The calculations on this form—sometimes called the Means Test— reduce the debtor’s income by living expenses and payment of certain debts, resulting in an amount available to pay other debts. If the debtor’s income after the expense deductions is still high enough, it will give rise to a presumption of abuse. A presumption of abuse does not mean the debtor is actually trying to abuse the bankruptcy system. Rather, the presumption simply means that the debtor is presumed to have enough income that the debtor should not be granted relief under chapter 7. The debtor may overcome the presumption by showing special circumstances that reduces the debtor’s income or increase the debtor’s expenses. If the debtor cannot obtain relief under chapter 7, the debtor may be eligible to continue under another chapter of the Bankruptcy Code and pay creditors over a period of time. Some individuals are exempt from the Means Test scrutiny. Statement of Exemption from Presumption of Abuse Under § 707(b)(2) (Official Form 122A-1Supp) determines whether the debtor may be exempted from the presumption of abuse because the debtor does not have primarily consumer debts. A Chapter 7 debtor is exempt from the means test if the debtor’s debts are NOT primarily consumer debts. But what does the phrase consumer debts mean? The Bankruptcy Code provides a definition in 11 U.S.C. § 101(8), stating a consumer debt is a “debt incurred by an individual primarily for a personal, family, or household purpose.” So, debts related to the family home, car, and furniture are consumer debts. However, debts related to a business are not consumer debts.