My mother pays for my child's daycare. Do I count this as income on the Chapter 7 means test?

If someone else pays for your child's daycare or childcare, you must list this on the Chapter 7 means test.

The Chapter 7 Statement of Current Monthly Income and Means-Test Calculation (Form B 22A), commonly known as the "means test," is a series of calculations used by the court to determine whether you qualify to file a Chapter 7 bankruptcy, based on your income during the six months before you file. If your household income is below  the median income in your state, you qualify to file a Chapter 7 bankruptcy. If your income is above the median income, the means test determines whether you have enough disposable income (income left over after you pay your expenses) to repay all or part of your debt.

Check out Chapter 7 Eligibility & the Means Test to learn more.

Do I Have to List My Mother’s Contribution toward my Child’s Daycare as Income on the Means Test?

Yes. Both the Bankruptcy Code (11 U.S.C. 101(10A)) and Section II of the means test clearly state that you must list your current monthly income from all sources, including any amount regularly paid by someone else for you or your dependents’ expenses, such as daycare.

Although the means test requires that you disclose your “current monthly income (CMI),” CMI actually refers to the average monthly income that you received during the six months before the month in which you file bankruptcy. This amount might be different than the income you are receiving now, for example, if you lost your job or took a pay cut.

Example. Your mother has been paying your $300 monthly daycare expense for at least a year. She has paid for daycare for each of the last six months and you plan to file bankruptcy this month. $300 times 6 months is $1,800. Divide $1,800 by 6 months and you get $300/month. $300 is the monthly average you would include on your means test.

If your mother just began paying your $300 daycare expense two months ago, you would list the average of the two payments made within the six month period. $300 times 2 months is $600, divided by 6 months is $100 per month, which is the amount you would list on the means test.

Note that there is a separate schedule (Schedule I) in your petition where must list the actual income you are receiving when you file bankruptcy instead of the income you received during the last six months. If someone just started or stopped helping you with your expenses, the amounts on the means test and on Schedule I will be different.

You can find a fact sheet that answers specific questions about the means test on the Department of Justice’s Bankruptcy Reform website at The Department of Justice makes clear that if someone pays you or your dependents’ expenses, whether they pay monthly, quarterly, or annually, whether they pay you or the creditor, and regardless of whether they are a relative or they live with you, the payments must be listed as income on the means test.

The Means Test Allows You to Deduct Expenses

If your income is below the state median on the means test, you qualify to file under Chapter 7 and you won’t be required to further complete the means test and list your expenses. If your income is above the median, you are required to list your monthly expenses to determine whether you have enough disposable income to repay all or part of your debt. Including your mother’s contribution to your childcare may cause your income to be above the median, but the means test will allow you to list the actual daycare expense as well and essentially cancel out the additional income.

Example. Your mother gives you $300/month for your daycare expense. You include $300 from your mother in your average monthly income on the means test, and this causes your income to be above the median income in your state. You go on to list your expenses, including your $300/month daycare expense. The expense cancels out the income, so this will not disqualify you from filing a Chapter 7 bankruptcy, if you otherwise qualify.

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