Numbers a-keep On Changin’
Two important numbers are scheduled to change around November 1, 2011: 1) The average median income used to complete the means test for new bankruptcy filings; and 2) the costs for bankruptcy filing fees.
Median Income for Future Bankruptcy Filings
In 2005,BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act) was passed, which requires that most people will have to apply a “means test” to determine if they are eligible to file a Chapter 7 case. I never recommend you use an online calculator to fill these out because the laws change and the calculator can’t give you the specific advice and first-hand experience in completing the means test. Accuracy on the means test can translate to a difference of thousands of dollars, when calculating how much you would have to pay your unsecured creditors back in a Chapter 13 case, and determines the length of your Chapter 13 plan. There are times when a means test can overstate your income, denying you the opportunity to pay your unsecured creditors nothing in a Chapter 7 case. Thus, if you “pass” the means test, you have the option of filing a Chapter 7 case.1
One of the most pivotal numbers used for determining whether you pass the means is the average median income for your household size in your state. If your household income (calculated by averaging most sources of income over the last 6 months) is above the average median household income, you’ll need to roll up your sleeves and pay special attention to the means test to see if you still qualify to file a Chapter 7. If your household income is lower than the average median household income, your means test is very easy to complete.
Bad News: as the economy continues to flatten or downturn, the average median household income continues to decline. Thus, the threshold to “pass” the means test is getting lower (and therefore harder) to pass.
I’ll post the new numbers once the US Trustee announces them. These numbers have changed twice a year (around March and November.)
So if your income is close, or even above the median household income for your county, visit a bankruptcy attorney. Our bankruptcy office in Wausau, Wisconsin has the data and experience to guide you through the means test if you plan on filing bankruptcy in Wisconsin (or in limited cases, Colorado.)
Bankruptcy Filing Fees Increase by Seven Bucks
Effective November 1, 2011, the bankruptcy filing fees will increase by $7 dollars.
Therefore, a Chapter 7 filing fee will cost $306 and a Chapter 13 filing fee will cost $281.
