All the pennies within the last six months.... what the heck does that mean?

What does "all the pennies in the last six months mean?" The means test looks at all the pennies in the last six months. You must take this test in order to qualify for bankruptcy. The means test counts every penny for the last six months starting the last month before filing bankruptcy. So if you file bankruptcy on November 10, 2007 you must count all your pennies within the months May 1 through October 31.

It truly comes down to every penny that has been acquired by you in the last six months. So our calculation begins with every penny you have earned within the last six months. Then you add every penny earned by your spouse if you are married. Then you add every penny from the sale of property received with that six month period. Add every penny from a 401(k) or other pension cash out. They key term here is "cash out." If it is a loan don't add the pennies. Then you look at the pennies from your tax refund. Look at the tax refund pennies but you do not have to add them to your calculation. However, if your parents, roommate, significant other or other parties have given you money on a regular basis or one large lump sum you will need to add these pennies to your means test. Do you have income from social security? Then like tax refunds you do not need to count these pennies for your means test calculation.

As you can see not only is a penny saved is a penny earned but pennies do add up and count towards your means test. So be sure to know how many pennies you have acquired during the last six months and tell your attorney about them. It could make the difference between filing a Chapter 7 or a Chapter 13 and if you live in the Kansas City Missouri District it could make the difference between qualifying for bankruptcy and not.

SSI is not considered for the means-test or 1325(b)(1)(B)

Social Security Income under the new act is NOT used in either the means-test calculation or under Schedule I vs J to determine the disposable income per month. You must still list the income under Schedule I but the Trustee cannot deny the confirmation of the Plan for failure to contribute the SSI to the creditors under 1325(b)(1)(B).

This decision does not address the bad faith issue of 1325(c). Meaning that the trustee may raise the issue that it is bad faith to keep $1,000 disposable social security income in his pocket each month and NOT pay his creditors. Keep in mind that the goal of bankruptcy is a balancing test between the rights of the creditors and the rights of the debtors.

I think this will be the next issue raised in the near future.