Disposable Monthly Income (DMI)

Definition - What does Disposable Monthly Income (DMI) mean?

Disposable monthly income refers to the money that a person or an entity has left over after paying for all monthly necessities. However, there is no uniform definition of what exactly disposable monthly income really consists of. Some schools of thought say that it is your income left over after your taxes have been paid for.

Justipedia explains Disposable Monthly Income (DMI)

For example, disposable monthly income is the money that a person has left over during a monthly period after the person has paid for all of their bills, necessary living expenses, and any and all other payments that must be made by a person during a monthly period. The money that is left over can then be disposed of in any manner in which the individual chooses since it is essentially "extra" money.

For individuals undergoing Chapter 13 bankruptcy, it is based upon a state median income, the person's actual income, and their actual monthly necessities. The Trustee in the bankruptcy determines if the person has a disposable monthly income. In a Chapter 13, if the Trustee determines that there is no disposable monthly income to use in a repayment plan, the debtor is then converted to a Chapter 7 bankruptcy.
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