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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 17885
Experience:  B.A.; M.B.A.; J.D.
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are student loans considered income in bankruptcy for the purposes of means test

Resolved Question:

are student loans considered income in bankruptcy for the purposes of means test?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 6 years ago.

Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.

 

are student loans considered income in bankruptcy for the purposes of means test?

 

Response: No, they are not.

 

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Official_2010/B_022A_0410.pdf

 

Customer: replied 6 years ago.
Thank you for your reply but I would like a little clarification. You linked me to B22A form which I am sufficiently familiar with, but on line 10 the question is "Income from all other sources", so essentially I would like to know if Federal Student Loans are “Income from all other sources” for B22A or Schedule I purposes. And if they are in fact not considered income (and conventional logic would suggest that borrowed money should not be considered income, ever), some kind of authority on the issue would be nice.
Expert:  Phillips Esq. replied 6 years ago.

 

11 U.S.C. Section 101 subsection (39A) defines median family income as follows:

 

"The term "median family income" means for any year--

(A) the median family income both calculated and reported by the Bureau of the Census in the then most recent year; and

(B) if not so calculated and reported in the then current year, adjusted annually after such most recent year until the next year in which median family income is both calculated and reported by the Bureau of the Census, to reflect the percentage change in the Consumer Price Index for All Urban Consumers during the period of years occurring after such most recent year and before such current year."

There is no specific definition of income in the Bankruptcy Code. Student loans are not income, they are not wages, salaries, bonuses, tips, or commissions and thus should not be listed on Schedule I and the Means Test form.

 

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