24 Sep Means Test Numbers Change November 1
The income figures used on the bankruptcy means test will change for debtors filing petitions on and after November 1, 2009, the U.S. Trustee program has announced. The numbers could go up or down. Some people are predicting lower figures due to the economic downturn.
Data from the U.S. Census Bureau is adjusted for family size and locale each year to revise the means test, which determines whether you are eligible for chapter 7 bankruptcy and how much you have to pay unsecured creditors in chapter 13 bankruptcy.
Debtors whose currently monthly income is below the median income pass the means test any may file chapter 7 or 13 bankruptcy. Debtors whose family income is above median (half of the state’s families above and half below this number) have to fill out eight pages of forms to determine whether or not allowing them to file a chapter 7 bankruptcy would be abusive.
Sounds complicated doesn’t it? It is, especially since current monthly income is not current, is not monthly and is not income. The definitions use a six-month historical look back period that is doubled and then divided by 12 for average income. All types of money coming in to everyone in the household is figured in, not just taxable income, although Social Security is not counted, and some items are excluded. There are all sorts of factual and legal arguments over the definitions and how to fill out the forms, and what counts and what doesn’t count.
Your bankruptcy attorney will determine for you whether or not you pass the means test and what your options are.
For more reading about the bankruptcy means test, see:Car debt is key to means test deduction.
Do I need to pass the means test if I have business debts?
Can I quit working overtime or having a part-time job before filing bankruptcy?
What is calculated in gross income for the means test?
Means test-dont try this at home!
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