In both Chapter 7 and Chapter 13 bankruptcy you must file forms on which you list your income and expenses. Some of the numbers you list come from your personal records, such as your income from employment. Other income and expense figures that you need to complete the forms are set by national, state, or regional standards.
Here’s how to find the income and expense figures you need to complete your Chapter 7 and Chapter 13 bankruptcy forms.
When you file for Chapter 7 bankruptcy, you must file Form 22A – Statement of Current Monthly Income and Means Test Calculation. The information and calculations on this form comprise the “means test” which determines if you are eligible for Chapter 7 bankruptcy.
(For a comprehensive discussion of the means test, including how income and expenses play a role in whether you pass it or not, see the articles in Chapter 7 Eligibility & the Means Test.)
On Form 22A, you must list all of your income and then compare it to the average income in your state for a household of the same size. You must also list your expenses. Some of the expense amounts you list are amounts you actually spend each month. Others are amounts set by national, state, or regional standards. Sometimes you list your actual expense or the allowed amount, whichever is less. And sometimes you can list the standard allowed amount, even if you spend less on that item each month.
When you for Chapter 13 bankruptcy, you must complete Form 22C – Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income. This form determines how long your Chapter 13 plan will last (three or five years). It also calculates your “disposable income” which plays a role in how large your monthly payments will be under your repayment plan.
(For a comprehensive discussion of the Chapter 13 plan, and how your income and expenses play a role in your plan, see the article in The Chapter 13 Repayment Plan.)
You must list income and expense figures on Form 22C. Like in Chapter 7, some of those figures will come from your personal records, and some will come from national, state, and regional standards.
In order to determine the median income in each state, bankruptcy law uses information published by the Census Bureau based on state and family size.
To find the most recent Census Bureau figures, go to the website of the U.S. Trustee at www.justice.gov/ust, click on “Bankruptcy Reform,” “Means Testing Information,” select the correct time period from the dropdown menu, and click on “Median Family Income Based on State/Territory and Family Size” in Section I: Census Bureau Data.
Bankruptcy law turns to IRS standards to set allowable amounts for certain expense. Some of this information is applicable nationwide, and other figures are based on the state or region where you.
To find current IRS expense standards used for Forms 22A and 22C, go to the website of the U.S. Trustee at www.justice.gov/ust, click on “Bankruptcy Reform,” “Means Testing Information,” select the correct time period from the dropdown menu, and then click the appropriate categories in Section II.
Here are the standards you’ll need:
National standards for food, clothing, and health care. The IRS has set national standards food, housekeeping supplies, apparel and services, personal care products and services, and out-of-pocket healthcare (this is separate from the amount you pay for health insurance).
State standards for housing and utility costs. The bankruptcy forms require you to use state figures for housing and utility costs.
State and national standards for transportation expenses. Allowable amounts for ownership costs of a vehicle (loan or lease payments) are nationwide. Costs of maintaining a vehicle (maintenance, repairs, insurance, fuel, registrations, licenses, inspections, parking and tolls) are set by region. If you take public transportation, the expense amount is set nationwide.
Forms 22A and 22C also calculate how much the bankruptcy trustee will get paid for administering your Chapter 13 bankruptcy case. Even in Chapter 7 bankruptcy, you must calculate this amount as part of the means test calculations to see if you could repay some of your debts in a Chapter 13 bankruptcy. (You don’t have to do this calculation, however, if you already pass the means test without it.)
This number is based on a percentage of your projected plan payment. The percentage varies by judicial district. You can find the multiplier in your district on the U.S. Trustee’s website. Follow the instructions above for means testing, and look in Section III: Administrative Expense Multipliers.
To learn more about filling out the bankruptcy forms, see Filing for Bankruptcy.