Tithing and Charitable Contributions Allowed in Bankruptcy

The Bankruptcy Code allows debtors in bankruptcy cases to use their tithing and charitable contributions as a deduction on their means test. The means test is used to determine eligibility for discharge in Chapter 7 bankruptcy and in calculating the payment in a Chapter 13 bankruptcy case by determining how much disposable income is available to be paid to the unsecured creditors each month. Not all charitable contributions qualify as a deduction. Contributions must be made to religious and charitable organizations that meet the requirements described in sections 170(c)(1) & (2) of the Internal Revenue Code of 1986. These contributions are limited to 15% of the debtor’s gross income. Debtors’ aren’t required to prove contributions in the past in order to receive a deduction on the means test for future contributions. However, if debtors choose to take the deduction they should document their future payments so that if the trustee requests proof of payments they will be available.