Chicago Bankruptcy Basics: Household Income

As was discussed in the previous Chicago Bankruptcy Basics post, budget can play a big role in determining if bankruptcy is the right option to pursue.  The last Chicago Bankruptcy Basics post discussed the expense side of the equation and how all expenses in the household must be considered when evaluating the available bankruptcy alternatives.  Now we will turn to the household income side of the budget.

Just like with the expense side, when calculating income for bankruptcy purposes, all income within the household must be taken into consideration.  This means that income from a non-filing spouse, a family member's contribution, a roommates contribution or the receipt of public benefits such as Section 8 assistance or a Link card will be counted as part of the household income when filing for bankruptcy in Chicago.  In some situations, the income from other members of the household can impact the available bankruptcy options.  For example, a roommate's income contribution may be enough to make a Chapter 13 bankruptcy payment feasible and allow a debtor to save their home from foreclosure.

Another factor to keep in mind when calculating household income is that the bankruptcy code defines income more broadly in some instances that the Internal Revenue Service's definition of taxable income.  For example, the IRS may not consider child support to be taxable income, but it is certainly considered as household income in a bankruptcy filing.

Guidance from an experienced consumer bankruptcy attorney can be invaluable when dealing with the complex ins and outs of budgeting for your bankruptcy case.  It is always important to discuss all of the sources of household income you have with your bankruptcy attorney so that they can plan the most beneficial and effective strategy for your particular case.  Be sure to disclose to your bankruptcy lawyers any inconsistencies in your income and any known changes that will occur in your income as well.  The Chicago bankruptcy attorneys at Ledford & Wu have prepared literally thousands of bankruptcy budgets and will guide you to success in your bankruptcy filing.  Contact us for a free consultation today.

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