When you file for Chapter 13 bankruptcy, you must file Form 22C -- Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income. On this form, you provide the court with detailed information about your income from the previous six months and your current household expenses, and then use these figures to calculate your disposable income and determine how long your Chapter 13 plan must last.
(To learn about the other forms you must file, see Completing the Bankruptcy Forms. To learn more about the Chapter 13 plan, and the role of disposable income in your plan payments, see The Chapter 13 Repayment Plan.)
What Is the Purpose of Form 22C?
Form 22C plays an important role in Chapter 13 bankruptcy. On the form, you:
- calculate your income
- compare your annual income to the state median income – this determines (1) whether your plan must last for five years, or can last as little as three years, and (2) whether you can use your actual expense amounts or must instead use preset expense figures in determining your disposable income, and
- if your income is higher than the state median, deduct certain expenses from your income to calculate your “disposable income.” (This figure will play a prominent role in how much you repay to unsecured creditors.)
How to Get Form 22C
How to Complete Form 22C
Here’s a general discussion of the information required in each section of the form, and the reason you must provide this information. For in-depth information on completing this form, consult with a good self-help book or a bankruptcy lawyer.
Part I. Report of Income
In the first section of Form 22C, you provide the court with information about all sources and amounts of your income. The figures are based on the six complete months before you file for bankruptcy. For example, if you file for bankruptcy on August 15th, the income information on Form 22C will be from January through June. This is different from the income information you provide on Schedule I, which asks for the amount of income you receive when you file for Chapter 13 (not the six months prior).
Be sure to state each income amount as a monthly figure, regardless of how often you receive that income.
On the last line of Part I (line 11), you add up all of the income columns, and add together the income of both spouses, to come up with your total monthly income.
Part II. Calculation of Your Plan Period
In the second section of Form 22C, you determine how long your repayment plan must last.
If you are married, not filing jointly with your spouse, and contend that some of your spouse’s income should not be included in this calculation, you list those amounts and your reasons for excluding them on line 13. This is referred to as the “marital adjustment.” (To learn more, see The Marital Adjustment Deduction on the Means Test.)
After deducting any marital adjustment, you multiply your monthly income (calculated in Part I) by 12 in order to come up with your annual income. You then compare this to the median income in your state. You can find that figure on the U.S. Trustee’s website at www.justice.gov/ust, here.
If your income is less than your state’s median income, your repayment plan can last as little as three years. If your income is more, then your repayment plan period must be five years.
Part III. Which Expense Amounts Can You Deduct From Your Income?
In the third section of Form 22C, you again compare your annual income to your state’s median income. As in Part II, you may be able to deduct some of your spouse’s income in certain circumstances.
If your income is less than the state median income, you are essentially done with the form. This is because you are allowed to use your actual expense figures when figuring out your disposable income for purposes of your Chapter 13 plan, so the rest of Form 22C does not apply to you.
If your income is more than the state median income, you must complete the rest of the form. If you fall within this category, when you determine your disposable income, you must use certain preset expense figures, rather than your actual expense figures. The rest of the forms walks you through these allowable expense deductions.
Part IV. Calculation of Deductions From Income
The fourth section of Form 22C lists all of the allowable expense deduction categories. For some of those, you must use preset national, regional, or state figures, rather than the actual amount you spend in that category.
For example, on Line 24A, if you are a two-person household, you may deduct $985 for food, housekeeping supplies, clothes, and personal care, regardless of how much you actually spend on these items each month. The form directs you to the most current figures on the website of the U.S. Trustee.
In Subpart C of this section, you deduct the amount you will have to pay to secured creditors during the five years of your repayment plan. You also deduct arrears on secured debts, the amount you’ll have to pay on certain priority claims, and the commission you’ll pay to the bankruptcy trustee. For all of these, you divide the total amount by 60 to come up with a monthly amount.
In Subpart D you total all of your allowable deductions.
Part V. Determining Your Disposable Income
In this section, you determine the amount of your disposable income by starting with your income (from Part I) and subtracting your allowable deductions (from Part IV), along with some other things, like child support and certain retirement deductions from your payment.
Part VI. Additional Expense Claims
Here’s where you put expenses that did not fit elsewhere on the form that are reasonably necessary for the support of your family. The court will look at these expenses with special scrutiny.
Part VII. Verification
By signing Form 22C, you declare under penalty of perjury that everything is true and correct.
This article provides general information only. There are many legal issues involved and important decisions to be made when filing for bankruptcy. You must understand the entire bankruptcy process, learn about the applicable federal and state laws, and determine how those laws will affect your particular situation before you complete the bankruptcy forms.