The Puerto Rico Statement of Current Monthly Income and Disposable Income Calculation for Use in Chapter 13 — Post 2005 is a legal document used in bankruptcy cases for individuals residing in Puerto Rico. This statement is crucial for determining a debtor's ability to repay their debts under Chapter 13 bankruptcy. The statement includes detailed information about the debtor's current monthly income, which is a key factor in determining their eligibility for Chapter 13 bankruptcy. Current monthly income refers to the average monthly income received by the debtor over the six months preceding the bankruptcy filing. The calculation of current monthly income includes various sources such as wages, salary, commissions, bonuses, tips, and rental income, among others. It is important to accurately report all sources of income to ensure a fair assessment by the bankruptcy court. Furthermore, the Puerto Rico Statement of Current Monthly Income includes the calculation of disposable income. Disposable income is the amount left after deducting certain allowed expenses and necessary payments from the debtor's current monthly income. These necessary payments include expenses such as taxes, child support, health insurance, and other mandated obligations. The disposable income calculation is crucial because it determines the debtor's repayment plan under Chapter 13 bankruptcy. The debtor will be required to make monthly payments to a trustee, who will distribute the funds among the creditors based on the disposable income calculation. In Puerto Rico, there may be different versions or variations of the Statement of Current Monthly Income and Disposable Income Calculation for Use in Chapter 13 — Post 2005. These variations might be specific to the local laws and regulations governing bankruptcy cases in Puerto Rico. It is essential for individuals seeking bankruptcy relief under Chapter 13 in Puerto Rico to consult with a qualified bankruptcy attorney to ensure they are using the correct version of the Puerto Rico Statement of Current Monthly Income and Disposable Income Calculation. Filing the incorrect version or providing inaccurate information can have adverse consequences and may lead to the dismissal of the bankruptcy case.
Puerto Rico Statement of Current Monthly Income and Disposable Income Calculation for Use in Chapter 13 - Post 2005
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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.
How Is Disposable Income Calculated? Your last six months of income divided by six to get average monthly income. If you own a business or work for yourself, you must calculate average monthly income. Any money you get from rent on an asset you own, interests, dividends or royalties.
Other Required Payments Through a Chapter 13 Bankruptcy Plan There usually are two other payments included in the Chapter 13 bankruptcy plan. The first is the trustee's fee, which is 10% of the total amount paid into the case.
Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause."
To calculate your monthly payment amount in a Chapter 13 bankruptcy, calculate your income for the six months before your bankruptcy filing. Deduct allowable expenses to determine your disposable income. Pay your priority debtors and any secured debts that you want to keep after the bankruptcy.
The Chapter 13 plan payments also begin the month you file, not when your hearing begins. To calculate your plan payment, you must essentially look at your budget. Your plan payment is what you have left after deducting your reasonable and necessary expenses from your income. We call this your disposable income.
If you opt for a Chapter 13 bankruptcy filing, you will be required to pay back at least some of your debt under the plan. The amount you are required to pay back is your disposable income amount over the course of the bankruptcy. Any debt that remains beyond that will be discharged by the court.
Can I lower the monthly payments? If your income goes down during your Chapter 13 bankruptcy and you can't make your monthly payments any longer, you can ask the bankruptcy court to reduce them.