People who are thinking about filing for bankruptcy are faced with an avalanche of documents they need to compile so their lawyer can draft their petition and scheduled for filing. Some of those documents are designed to provide full disclosure of your income and assets, but there is one thing that goes right to the heart of your ability to get relief under the U.S. Bankruptcy Code.
That cornerstone of your case is known as current monthly income, and it's defined as the average monthly income from all sources that you have received during the 6-month period ending on the last day of the calendar month immediately preceding the date on which your bankruptcy case is filed.
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In other words, if you file your bankruptcy case in July then your lawyer is going to need to know your exact income for the period of January through June in order to determine your current monthly income (we'll call that CMI from now on).
Why do you care about your current monthly income? If CMI is below the median income for a household of your size in your state then a Chapter 7 bankruptcy case cannot be dismissed (in other words, thrown out) of court for abuse of process. This means that in most cases, when your CMI is below the state median for a household of your size then you're home free and can be reasonable sure that your case will go through smoothly.
Median household income for all cases filed before March 15, 2010 in New York State are as follows:
1 Person: $46,485 2 People: $58,109 3 People: $69,421 4 People: $82,457
Median household income for all cases filed on or after March 15, 2010 in New York State are as follows:
1 Person: $46,320 2 People: $57,902 3 People: $69,174 4 People: $82,164
In case you're wondering if there's a typo - yes, the median household income figures actually go down after March 14, 2010 due to the economic situation in New York.
So if your household income (including your spouse if you're married and living together) is under the state median income then your case is undoubtedly a simpler one. Working with your lawyer, and providing all income information for the CMI period, will help you find out whether your Chapter 7 bankruptcy will be an easy or difficult case.
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