A main issue in any Chapter 7 or Chapter 13 Bankruptcy case is the calculation of what is known as “current monthly income”.    This issue is the often the most important one in determining whether a debtor qualifies for a chapter 7 bankruptcy or is required to pay their creditors in a chapter 13 bankruptcy.

In some cases, even though a debtor has received money, it is not counted as “income” for purposes of determining qualification for a chapter 7 bankruptcy case.    Funds received from the following are not included:

(1) money received from the sale of property, such as stocks, bonds, a house, or a car (unless the person is engaged in the business of selling such property);

(2) withdrawals of bank deposits;

(3) money borrowed;

(4) tax refunds;

(5) gifts; and

(6) lump-sum inheritances of insurance payments.

See U.S. Census at http://www.bls.census.gov/cps/ads/1995/sglosary.htm.

Thus it is important to review these issues with an experienced bankruptcy attorney in determining qualification for a chapter 7 or chapter 7 bankruptcy case.

Tags: Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

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