It should not be a surprise that income is one of the most important pieces of information listed on the bankruptcy forms. The bankruptcy forms ask about income in different ways. Different forms require you to list current income, past income, and even future income!
When it comes to listing past and current income things can be a bit complicated if you didn’t have any income from employment or a business. Maybe you are (or were) a stay-at-home parent or spouse, unemployed, incarcerated or experiencing homelessness.
Even though you may not receive income for employment, business or benefits, your basic monthly expenses were still covered somehow. The court needs to know how you paid for your expenses during the last two calendar years and how you will pay for your expenses after filing.
Often if someone doesn’t have any kind of income, a family member, friend, or someone else paid (and maybe still pays) their expenses for them. When someone else pays or covers your expenses, that is an outside contribution.
The best example of an outside contribution is living with family or friends for free. The money the family or friends used to pay your share of the housing and food costs would be an outside contribution. Even if there was no exchange of money, if someone covered an expense for you it is an outside contribution and considered income.
Why is an outside contribution income?
Simply put because someone paid the expense for you!
How to properly list income from outside contributions on Schedule I...
Note: The following guidance assumes that you will continue to receive contributions. If you know that the contributions will not continue after filing your case, you don’t have to list them as income on your Schedule I. But, you still have to include the full amount received in the 6 months before your case is filed in your means test analysis.
… if you get regular monthly contributions from someone.
If it’s the same amount every month, list that amount. If the amount you receive fluctuates, take a look at how much you received in the past and calculate an average based on that.
This is easiest to illustrate with an example:
Debbie’s aunt has been contributing to her household expenses by helping her out with varying amounts for 8 months. She expects to continue helping Debbie at about the same level even after bankruptcy is filed. Debbie has collected the following information about her aunt’s contributions
- Month 1 - $400
- Month 2 - $50
- Month 3 - $300
- Month 4 - $275
- Month 6 - $325
- Month 7 - $250
- Month 8 - $450
- Total contributions over 8 months: $2050
- Divided by 8 for average monthly contribution: $256.25
Debbie’s Schedule I will show that her income from contributions is about $256.25 / month. To determine what Debbie’s means test will show, consider Bob’s example here. The key difference is that the means test only looks at the last 6 months.
… if someone is paying one or more of your monthly bills.
That’s considered your income even though you never see the money. It may be a bit easier to calculate, if the amount of the bill doesn’t change, but overall, the calculation is the same as in the example above.
Let’s continue the analysis using Debbie’s example again:
Assume that starting in month 3, Debbie’s aunt started paying Debbie’s $100/mo. car insurance in addition to giving money cash directly. Debbie’s aunt expects to continue to pay this bill for a while longer. Even though Debbie never sees this money, it still increases her monthly income by $100, bringing her aunt’s total monthly contributions to $356.25.
... if you have a roommate that you split your bills with.
In an ideal world, you’d have a written agreement with your roommate that spells out how much each one of you is contributing to your joint expenses. Most people don’t live in an ideal world, so how to best figure out your income and expenses will depend in large part on how you and your roommate(s) are handling the details.
Start by figuring out your expenses
Make sure you put all of the “household expenses” like rent, electricity, internet service, etc. in one section. Keep all “personal expenses” separate. No one is interested in how much your roommate pays for their cell phone bill; that’s their personal expense. Your cell phone bill is your personal expense; that’s the only one that matters in this context.
Let’s take a look at some common scenarios to illustrate how you can use your household budget to figure out your roommates contributions:
Scenario 1: You pay this bill, I pay this bill
This one’s relatively easy. Add up the total amount your roommate pays for the bills they’re covering for the household. That’s their monthly contribution. List all of the household bills your roommate has agreed to pay as an expense on your Schedule J as well. It’s essentially the same thing as Debbie’s aunt paying her car insurance for her in the example above.
Scenario 2: We both contribute X to a joint account to pay all household bills
Since the joint account means that you have bank records to look to, this one is pretty straightforward to figure out as well: Simply look at the bank statements to see how much your roommate is putting in on average and calculate the total based on that. As before, the bills that are being paid out of this account will be listed as an expense on your Schedule J as well.