How should I calculate my income if it's inconsistent from month to month?

There are two different times that you have to calculate your income for your bankruptcy forms, and each time looks at a different time frame.

The Means Test

The means test looks at the income you received in the last 6 months. It doesn't matter whether it's regular or sporadic. Once you've determined the month you will file in, add up your gross  income you received in the 6 prior months. This will not be the same as your take home, as gross is before taxes and other deductions are taken out.

Example: Bob wants to file his case in July, and he's collected the following information about his income:

• January - $1,000
• February - $1,000
• March - $750  (Bob got laid off)
• April - $0
• May $1250  (Bob got a new job)
• June - $1,500
• Total gross income in the 6 months before filing: $5,250
• Divided by 6: $875

Even though there isn't a single month in which Bob made $875, that's his monthly income on the means test.

Multiple sources of income

If you have multiple sources of income, you may have to do this calculation a few times, separating wages, business income, outside contributions, and whatever else you may receive. While the total in Line 11 will stay the same, Official Form 122A-1 (Chapter 7 Statement of Your Current Monthly Income) asks for the income to be broken down by category (wages, business income, etc.)

Schedule I (Income)

Schedule I is the other bankruptcy form that asks you for your income. Unlike the means test, this form does not look at what happened in the last 6 months. Instead, this form is asking for your monthly income as it is now and as you expect it to be in the next year.

In Bob's case, his monthly income going forward is $1,500 because that's what his new job pays. What happened 1, 2, 4, or 6 months ago does not change this.

Irregular income

This is where irregular income gets most tricky. If you have irregular income, you know how hard it can be to budget around it. After all, you're never quite sure how much you're bringing in from one month to the next.

If you've had the same source of income for a while, a good way to determine an average is to add up your income from the last 12 months, then divide the result by 12. If you've started the job recently and have a basic idea of what your income is going to be, put that. As long as it’s an honest estimate of what you think your average income is based on your experience, it’s ok if it’s not accurate down to the penny. You can always add a note at the bottom of the form to let the court know that the income is regular and may change in the next 12 months.