Median Income and the Means Test

In 2005, BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act) was passed. For more information about BAPCPA, through the lens of the U.S. Trustee Program, see this website.

One of the most “fun” parts of BAPCPA is the application of the means test in a consumer case (Form B22 in a bankruptcy petition).  Here is an example of Form B22A. If your household income (for the last 6 months before you file your bankruptcy petition) is below the median income for your household size in your state, then the means test is pretty easy. If your household income is above the median income, then the means test becomes more complicated.

How do you know if your household income is above the median income for your state? Here is a link to the numbers as of November 1, 2010. The numbers change pretty regularly, so it’s also a good idea to check here and make sure that the numbers you are accessing are the most recent numbers. If you are filing a consumer Chapter 7 Bankruptcy and your income is over the median income, Form B22 becomes a bit more complicated for you. Depending on the results of your Form B22, you may not qualify for a Chapter 7 Bankruptcy, and may be required to file a Chapter 13 bankruptcy instead.

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4 Responses to Median Income and the Means Test

  1. Bankruptcy means test calculators on the internet are used by some, does the author have any option on how useful they are?

  2. Elizabeth Rosar Chermack says:

    There are a lot of subtleties in the interpretation of the “Means Test,” so I don’t find online means test calculators to be very helpful.

  3. Elizabeth Rosar Chermack says:

    This website has updated median income numbers for cases filed on and after March 15, 2011:
    http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm

  4. Pingback: Minnesota Adoption, Bankruptcy, and Housing Blog by Elizabeth Rosar Chermack, Attorney at Law » Blog Archive » Filing bankruptcy while unemployed

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