Two numbers on a bankruptcy petition both say “monthly income,” and they almost never agree. That doesn't mean there's a mistake. The means test uses a rule-based figure called current monthly income, while Schedule I reports what the debtor is actually earning now. A trustee will compare them, so you need to understand why they differ and be ready to explain it. This guide shows how each is calculated and how to avoid errors, using means test income vs Schedule I as the framework.
Means test income vs Schedule I: two different questions
- The means test asks: “What did this household earn on average over the past six months?” It looks backward, using a fixed formula, to decide whether the debtor's income is above or below the state median and whether the case may be presumed abusive in Chapter 7. In Chapter 13, it helps set the plan length and minimum payment.
- Schedule I asks: “What is this debtor earning now, and what do they expect going forward?” It looks at current, real-world income after deductions.
Because they ask different questions, they use different periods, different definitions, and sometimes different household members.
How current monthly income is calculated
Current monthly income (CMI) is generally the average of all income received during the six full calendar months before the month of filing. Key points:
- It uses gross income, before taxes and payroll deductions.
- It includes more than wages: business and rental income (net of ordinary operating expenses), interest, dividends, pensions, unemployment, regular contributions to household expenses from others, and support received. Certain benefits, such as some Social Security payments, are excluded by statute.
- It averages the six-month period, so an income change last month is smoothed out, and a job loss or new job can make CMI differ greatly from what the debtor earns today.
- It depends on the filing date, because moving the filing date changes which six months are counted. Whether to adjust the date is the attorney's call.
The forms for this are the Chapter 7 means-test forms (Official Form 122A-1 and, when required, 122A-2) and, for Chapter 13, Official Form 122C-1 and 122C-2. See also 20 Chapter 7 Means Test Mistakes.
How Schedule I is calculated
Schedule I (Official Form 106I) reports current monthly income: gross pay, payroll deductions, net take-home, and other income the debtor actually receives now. It reflects the debtor's actual circumstances and any expected change in the next year. Business owners report net business income with an attached statement of gross receipts and ordinary expenses.
Why the numbers differ: common reasons
| Reason | Effect |
|---|---|
| Different time periods (six-month average vs. current) | A raise, job change, or layoff makes them diverge |
| Gross vs. net | CMI starts from gross; Schedule I shows deductions and net |
| Overtime and bonuses | Smoothed in CMI; may be irregular on Schedule I |
| Excluded income | Some benefits count on Schedule I but not in CMI |
| Contributions from household members | May be counted differently on each form |
| Business income | Both use net business income, but the periods differ |
How to prepare both numbers
- Collect six full months of income documents. Pay stubs, profit-and-loss statements, benefit letters, and bank statements. See How to Ask Debtors for Missing Documents and What to Do When You Have Missing Pay Stubs.
- Confirm the filing month. The six-month window depends on it.
- Enter each income source by month in the means-test form, and check the monthly average against the documents.
- Separately, build Schedule I from the latest stubs. Then compare.
- Write a note explaining any large gap, such as “Debtor started a new job in [month] at a higher rate,” or “Debtor was laid off in [month] and now receives unemployment.”
Special situations
- Joint filings and non-filing spouses. The household and income counted depend on the situation. See What to Do When Only One Spouse Is Filing Bankruptcy.
- Self-employed debtors. Income varies month to month; use real records, not estimates. See How to Report Debtor's Income Tax Due When Not Withheld.
- Rental income. See Which Schedule Do I List Rental Income In?
- Vehicle and other deductions in the means test. See The Means Test and the Older Vehicle Deduction and Bankruptcy Petition Tip for Means Test.
What not to do
Don't adjust either number to make the petition “look better,” and don't decide which figure to emphasize. If a debtor asks whether they “pass” the means test, the answer is the attorney's: “I'll finish the calculation and your attorney will go over the result with you.” See Is That Legal Advice?
Get the means test right. Our Chapter 7 & 13 training and certification system teaches the means test and the Chapter 13 calculations step by step. A bankruptcy petition review checks the means-test math and household size before your draft goes to the attorney.
Frequently asked questions
Which income figure does the trustee care about?
Both. The trustee compares them and expects any difference to be explained by the facts.
What if the debtor's income dropped recently?
Document it, and note it for the attorney. The law provides ways to address changes in some situations, and it is the attorney's decision.
Do I use gross or net income on the means test?
Current monthly income starts with gross income. Schedule I shows deductions and take-home pay.
This article is general education for bankruptcy professionals, not legal advice. Income definitions, exclusions, and form instructions are updated over time. Use the current Official Forms and the attorney's guidance. Questions about our courses? See the FAQ.