Nolo's Plain-English Law Dictionary
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- Current Monthly Income
As defined by the 2005 amendments to the bankruptcy law, a debtor's average monthly gross (before tax) income over the six months before the debtor files for bankruptcy. If the debtor's income has recently declined -- for example, because the debtor lost a job in the last few months -- then his or her current monthly income calculated according to this formula could be much more than the debtor is actually earning each month when he or she files for bankruptcy. The debtor's current monthly income is used to determine whether the debtor can file for Chapter 7 bankruptcy, among other things.
To learn more about how your income affects your ability to file for bankruptcy, see Chapter 7 Eligibility & the Means Test.