Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period (Form 122C-1)

The court trustee’s role is to evaluate your case, including your assets, debts, and income. They’ll need to decide how your property and creditors are handled, so it’s imperative that they have an accurate understanding of your overall circumstances. For a Chapter 13, the “Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period” (Form 122C-1) tells the court your average monthly income. Your income is compared to the median income for your state, which will assist in calculating your disposable income. These numbers will determine if your repayment plan will be three or five years.

Your Income

The court will need to know all your sources of income and whether you’re single or married. Your spouse’s income will need to be listed if you’re married, no matter how you decide to file. I’ll provide you with a possible list of income sources, but this could be your earnings/business income, unemployment/disability/cash government benefits, alimony/child support, investment interest, retirement/pension, or income from rental properties. You’ll use Form 122C-1 to list your average income for the last full six months. You’ll also list your income on Schedule I, which is your current monthly income, rather than an average. The combination of these forms is an excellent tool to demonstrate a loss of income that led to your bankruptcy.

Deductions and Commitment Period

Once we have your income documented, we’ll move on to your deductions. Which deductions you can use will vary depending on whether you’re single, married filing jointly, or married filing as an individual. Married individuals who decide to file bankruptcy on their own can take advantage of the martial adjustments deductions, which usually reduces the income that is included in the case.

We’ll use your average monthly income from Form 122C-1 and then deduct any allowable deductions. This amount is then multiplied by 12 to figure your annual income, which is then compared to the median income for your area. If you fall below the median, your actual expenses (which I can help you determine) will be used to calculate your disposable income. Your disposable income will also determine your “commitment period,” or length of time you’ll make Chapter 13 payments. If your disposable income is below the median, your repayment period will be three years. For filers whose income is over the median, we’ll need to use pre-set amounts for your expenses on Form 122C-2, and the commitment period will be five years. The court trustee can change the repayment period at their discretion if your payments seem too high or too low for the prescribed time.

Trust a Pro

There’s no need to worry about these specific requirements and regulations or to wonder which apply to you. We’ll build your case together, and I’ll make sure you’re always informed regarding your responsibilities, options, and outcomes.