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 13 bankruptcy case.
