How Do I Get a Complicated Median Income Test Question Answered?
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on Feb 23, 2008 in California, Chapter 7 Bankruptcy, Means Testing
Over the past few years, I find that I receive a lot of questions about the median income part of the means test. Here is an example of a question that I recently received through my Atlanta bankruptcy blog:
We are trying to determine if my unemployed wife can file a Chapter 7 BK on her own. She has over 50k in Credit Card debt and is in the process of a foreclosure on the home we just moved from in California. There are 7 members of our family, including 5 children. What is the max income that the husband can earn so that she CAN file Ch. 7 ? How is that income figure arrived at. Husband is an independent contractor, and has many business and medical expenses deducted each year from the 1099 income that he earns….Thank you for your help.
The best way to answer this question is “it depends.” This is the type of question that really calls for a personal meeting with a lawyer. Please understand that the calculation of one’s median income requires a detailed analysis of pay stubs from both husband and wife (regardless of whether wife is filing on her own) for the past 6 months. In this case, husband is an independent contractor, which means that someone will have to figure out an offset for his business expenses as well as an offset for any expenses that are not related to the household. Finally, it appears from this question that the family has recently moved from California - which suggests that someone is going to have to figure out which State’s exemptions and/or median income data would apply.
The Bankruptcy Law Network includes three fine lawyers based in California:
- Bay Area - Cathy Moran
- Chico area - Douglas Jacobs
- Southern California - Michael Doan
I think that a potential debtor with ties to California should contact one of these fine lawyers for assistance regarding a bankruptcy analysis.
If you live elsewhere and you are starting your search for bankruptcy advice, use the Bankruptcy Law Network as a starting point to find experienced counsel in your area who can help you.
I would also point out that a potential debtor should expect to pay an experienced bankruptcy lawyer for his/her time in performing a detailed median income test analysis, especially one with the complications noted here. It is a fact of life that consumer bankruptcy has become a lot more complicated now that we have a median income test and a means test. Bankruptcy may or may not be the right answer for this person - and my blog visitor would be wise to retain the services of an experienced lawyer for advice about how to proceed.
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