INCOME FOR BANKRUPTCY PURPOSES

When facing financial troubles, many people turn to family members or close friends for financial assistance. While these gifts or loans may be necessary in order to live, these contributions are considered as income for the purposes of filing bankruptcy. Regular or frequent contribution from anyone paid to a debtor qualifies as income. The Bankruptcy Code treats any money received in the six months prior to filing for bankruptcy as income. 11 U.S.C. § 101(10A). This includes any household expenses that are paid for by anyone other than the person filing for bankruptcy. 11 U.S.C. § 101(10A). For example, the car payments your brother made on your behalf is considered income for the purposes of filing bankruptcy. You should inform your attorney of any income you receive whether it is in the form of a gift, payment from your employer or a contribution to your household expenses, when discussing whether you qualify to file for bankruptcy.

Martin Conway

This blog is not intended to render legal services to the reader, including advice about bankruptcy or taxes. Consult with a lawyer concerning the specific application of the law to your unique circumstance.