If a debtor is filing Chapter 7 bankruptcy he/she may be required to take an income/means test to determine if they meet the income qualifications for filing for Chapter 7 bankruptcy. When it comes to the income/means test, many debtors mistakenly believe that they don’t need to report side income from a part-time job or business. The truth is that all income for the six months preceding the filing of a Chapter 7 bankruptcy must be reported to the bankruptcy court. Even if the income is not from a job, it is still considered income and must be accurately reported.
For example, if you sell homemade cookies and receive $200 in extra income a month, that money must be reported to the bankruptcy court as income. Even if it was as little as $20 a month, you must report it as income.
Another example…if you filed for bankruptcy in February; but worked a Xmas job for November and December, this income would need to be reported. Although your bankruptcy attorney might be able to argue that it should not be counted in calculating your median income because it was only a 2 month job, that argument may most likely require you and your attorney to appear before the bankruptcy judge.
If you are considering Chapter 7 bankruptcy and have several sources of income, including small side jobs or a part-time business, contact the bankruptcy attorneys at Allmand Law to find out how this will affect your ability to pass the income/means test required for filing Chapter 7 bankruptcy.