Effective May 1, 2018, there are now new means test figures for debtors filing for bankruptcy. These numbers are set by the US Trustee Program, which is a division of the Justice Department. The means test is essentially a budget test which applies if a debtor exceeds than the median income for their household size for the state in which they live. It was added to the Bankruptcy Code in 2005 and determines which bankruptcy chapter a debtor may qualify for. If a debtor passes the means test, they can file a Chapter 7 Bankruptcy, if not they will be limited to filing a Chapter 13.
The US Trustee program updates the median income figures periodically and the new figures have gone up. Below are the new median income figures for New York:
Household of 1: $53,132
Household of 2: $68,087
Household of 3: $80,840
Household of 4: $98,583
For household with more than 4 people, add $8,400 for each individual in excess of 4.
If a debtor has previously failed the means test but were unable to afford the required Chapter 13 Bankruptcy repayment plan, they may want to contact a bankruptcy attorney. They may now be below the median income for their household size. If they are still over the median income, they might want to have their means test recalculated, because with the change in figures, they may now pass.
If you have any questions about the means test or bankruptcy, please feel free to contact the Law Offices of David I. Pankin, PC at 888-529-9600 or by using our easy online contact form. David I. Pankin is a Brooklyn bankruptcy lawyer helping consumers in New York, Long Island and Westchester County since 1995.