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What Counts as Income in Bankruptcy?

by Adam Mack

As part of the bankruptcy process, the court will look at a debtor’s monthly income twice – once in the means test and once on Schedule I. One question that my clients often pose is, “What should I count as income?”  The answer is, “It depends.”

Means Test
As discussed elsewhere, as part of filing bankruptcy, a debtor must first submit their income to what’s commonly called a “means test” (which looks at the debtor’s income or, in other words, financial means).  For the purposes of the means test, “income” includes any money that you receive in a given month, including:

  • wages and salaries
  • money earned from hobbies or side-jobs
  • investment income
  • interest income
  • money from self-employed activities
  • money from property (rents, royalties, dividends, etc.)
  • alimony and maintenance
  • child support
  • pensions
  • prizes and awards
  • gifts
  • inheritances
  • unemployment compensation
  • qualified foster care payments

Of course no law would be complete without its exceptions.  One source of money that does not count as income on the means test is Social security income.

Schedule I
Income is counted differently on Schedule I than it is on the means test.  On Schedule I of the bankruptcy petition, the debtor counts all the income from the means test plus any additional money (such as social security) he or she might receive.

The Most Important Part
Even something as simple as “monthly income” can quickly become a complicated question.  What’s more, the court isn’t going to simply take your word regarding how much you make; everything needs to be documented using pay stubs, bank statements, tax returns, receipts, etc.  An experienced Kansas bankruptcy attorney can be invaluable in helping you not only correctly calculate your income but also in helping you list and locate the necessary documentation.


These articles are for general informational use and do not constitute legal advice. Since laws change over time, it’s possible some articles are out of date and for that reason, we make no representation that the articles are fully accurate. For actual, up-to-date legal advice (including a free consultation), please contact us!