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"CMI"

Related Keywords: income . means test .

Case Law Topics

  • Income: CMI six-month window: When is income "received?" When earned? When paid?

    Current Monthly Income
    New subsection 10A of 101 defines "current monthly income" as the average monthly income received by the debtor from all sources during the six calendar months preceding the filing. (The six-month period ends on the last day of the calendar month preceding the filing. )

    "Current monthly income" includes amounts regularly paid by other entities to defray the debtor's household expenses. Therefore, child support receipts are included as income without reference to their treatment by the Internal Revenue Code.
    "Current monthly income" does not include payments received under the Social Security Act, payments to victims of war crimes or crimes against humanity, or payments to terrorism victims.
    The debtor's current monthly income is no longer a snapshot of income on the date of the commencement of the case. Because it is an average of the debtor's income over the previous six calendar months, interesting anomalies may occur. For example, debtors who experience a dramatic reduction of income immediately prior to filing may fail the means test because their higher income is included in the calculation. In such instances the debtors would be required to show "special circumstances," like the loss of the higher paying job, to rebut the presumption of abuse. (Section 707(b)(2)(B)(i) requires the debtor to show "special circumstances" justifying a reduction of income or additional expenses in order to rebut the presumption of abuse. )

    In Chapter 13 Cases
    "Under the law predating BAPCPA, a chapter 13 plan may not be confirmed over the objection of the trustee or an unsecured creditor unless the debtor either pays unsecured creditors in full or devotes all "projected disposable income" to the plan for at least three years. Section 1325(b).
    BAPCPA makes several important changes in the calculation of disposable income,

    If the debtor's annualized current monthly income is larger than the State's median, allowable expenses are determined as provided by the means test under 707(b)(2).
    Conversely, if the debtor's annualized current monthly income is smaller than the State's median, then allowable expenses are those that are reasonably necessary for the maintenance and support of the debtor and the debtor's dependents without reference to 707(b)(2)importing for some purposes the provisions of 11 U.S.C. 707(b)(2) allowances and calculations.

    Finally, the BAPCPA introduces a new term in 1325(b)(1)(B): "applicable commitment period." If the annualized current monthly income of the debtor and the debtor's spouse is above the State median, the debtor must pay all disposable income into the plan for a five-year period. However, if the annualized current monthly income of the debtor and the debtor's spouse is below the State median, the debtor must pay all disposable income into the plan for only three years. "
    http://www.almb.uscourts.gov/BankruptcyReformImplementation/means_test_dhw.pdf

  • Chapter 13: Debtor may request alternate six month measuring period for CMI if result would be more accurate

    This odd procedural chicanery is made possible by section 101 which says that if you don't file a Schedule I, the judge can set the applicable date for measuring CMI.

    There is some question whether the debtor can make a motion to do this. Some cases seem to say yes.

    This line of cases has been viewed as an alternative to the either or debate over whether to use Form 22C or Schedules I and J in determining "projected disposable income"

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