If you wait to file a bankruptcy petition until tomorrow instead of filing it today, it may make a huge difference. Sure, today is Halloween, but that is not the reason it could make such a difference what day you file your bankruptcy case. Timing could be everything.
If your income is above the median income for your household size in your state, you must complete a “means test” when you file your bankruptcy petition. To determine whether you are above or below the median income, your gross income for the six month period prior to the month you file bankruptcy is considered. So if you file today, October 31, the six month period under examination is April through September. If you file tomorrow, November 1, the six month period excludes April but adds October. If you get the exact same paycheck each payday, this won’t make a difference. But what if you got a lump sum bonus or (like one of my clients who filed their case today) a retroactive pay raise in one of your October paychecks? In that case, you could be under the median today, but well over it tomorrow.
In addition, twice a year the median income changes, and tomorrow, November 1 is a day it is set to change, which is the subject of an excellent article posted earlier today by my Kansas colleague Jill Michaux. In New York State, the median income went down by between $1,000 and $3,000 per year, which could require some people to do the means test tomorrow, but not today.
Some income may not need to be included in determining median income. Social Security income, for example is excluded. Also, if you are filing a Chapter 12 farm bankruptcy, or if over half your income is business debt, you don’t have to complete the means test even if your income is over the median income.
Just because you are over the median income and have to complete the means test, it doesn’t necessarily mean that you can’t file a Chapter 7. Be sure to work with an experienced bankruptcy lawyer to see what your best options are, and when the best time to file your bankruptcy case would be.