The Illinois Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 helps individuals determine their eligibility for filing Chapter 7 bankruptcy based on their current monthly income and expenses. This statement is a crucial component of the bankruptcy process and requires individuals to disclose various financial information. The Illinois means test calculation follows guidelines established under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAP CPA). It is designed to identify individuals who have the means to repay their debts in a Chapter 13 bankruptcy rather than seeking complete discharge through Chapter 7. There are two main components of the Illinois Statement of Current Monthly Income and Means Test Calculation: 1. Current Monthly Income: This section includes all sources of income received by the individual over the past six months. It covers wages, salaries, self-employment income, rental income, dividends, unemployment benefits, pensions, and any other regular sources of income. It is essential to accurately report all income to ensure an accurate means test calculation. 2. Means Test Calculation: The means test calculation determines an individual's disposable income, which is the amount available to repay creditors after deducting necessary living expenses. This calculation includes deducting allowed expenses from the individual's monthly income. These expenses include housing, transportation, healthcare, childcare, education, and other reasonable and necessary costs. If an individual's current monthly income falls below the state median income for a household of their size, they automatically qualify for Chapter 7 bankruptcy. However, if their income exceeds the median, additional calculations are performed to determine whether they have enough disposable income to repay a portion of their debts through Chapter 13. It is important to note that the Illinois Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 may have additional variations or specific requirements based on local bankruptcy court rules. Therefore, it is crucial for individuals in Illinois seeking bankruptcy relief to consult with an experienced bankruptcy attorney or carefully review the local court's guidelines to ensure compliance with specific requirements. In summary, the Illinois Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 is a vital tool used in bankruptcy proceedings to assess an individual's eligibility for Chapter 7 bankruptcy. By accurately reporting their current monthly income and deducting reasonable living expenses, individuals can determine if Chapter 7 is a viable option for them to seek a fresh start financially.
Illinois Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 - Post 2005
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The first considers whether the filer's income is below the Chapter 7 income limit, which is the median in the state where the petition is filed. If income is less than the median for the prior six months and there is no reason to assume it will soon increase, the test is passed, and the Chapter 7 filing can proceed.
Current monthly income (CMI) is the average income from all sources in the six months prior to filing for bankruptcy. A person's CMI determines their eligibility for Chapter 7 bankruptcy which requires a person's CMI to be below the state median or pass a multi-factored test.
Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records; failed to explain satisfactorily any loss of assets; committed a bankruptcy crime such as perjury; failed to obey a lawful order of the bankruptcy court; ...
The means test is calculated by comparing the debtor's average income for the past six months (current monthly income), annualized, to the median income for households of the same size in the debtor's state of residence.
? income can vary month to month, and the means test finds the average. Your figure should include not only your wages, but also rental income, child support, alimony, pension or other regular monthly income. Social Security income does not count.
To calculate your six-month average gross income, you first need to add up your wages, salaries, and tips for the past six months. Then, divide that number by six to get your average monthly income. If you receive any income from sources other than employment, you'll need to factor that in as well.
Form 122A-1: Chapter 7 Statement of Your Current Monthly Income. Form 122A-1 focuses on your marital and filing status, as well as your monthly income as compared to your state's median income.
This formula takes a look at the amount of disposable income compared to the level of unsecured debt. If the debtor's disposable income, projected for a five-year period, is more than 25 percent of the total unsecured debt, the debtor will likely be denied a Chapter 7 filing.