When you make the call to speak to a Bellevue bankruptcy lawyer you will be able to learn about how your household median income will affect whether you can file a chapter 7 bankruptcy or chapter 13 bankruptcy. The median income is different in every state and is adjusted twice per year. The new median income is going to be adjusted on November 1, 2012 and depending on your family size and state this adjustment may be a good thing or a bad thing.
For instance in Washington State, the median income for a family size of 1 has gone down from $53,302 to $51,655 and seems to have followed in a similar fashion as the family size grows. Therefore it is possible that those eligible to file for Chapter 7 bankruptcy in October 2012 are no longer eligible to file for Chapter 7 in November of 2012. Further this could affect a debtors payments in a chapter 13 bankruptcy as the bankruptcy means test will show that the debtor has more disposable income available to give to unsecured creditors in a chapter 13 payment plan that will last 3 to 5 years.
When calculating the gross income of the household debtors should remember to count all sources of income, not just the income from employment, however income from social security is not counted in the means test calculation. In order to determine if you pass the means test, debtors should take their last 6 months of income (not including the current months income) and multiply that number by 2 to get the yearly gross income and determine if you are eligible to file for a chapter 7 bankruptcy. If you are an above median debtor for your family size, it is still possible to qualify for a chapter 7 bankruptcy through the means test if there are other factors or expenses such as medical that would cause you to not have any disposable income in which to give to creditors in a chapter 13 bankruptcy.
This entry was posted on Wednesday, October 31st, 2012 at 11:54 pm and is filed under Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.