The U.S. Trustee’s Office recently announced changes in the median income used in the Chapter 7 bankruptcy means test. This is significant since all Chapter 7 petitioners must pass the means test in order to qualify for Chapter 7. If an individual does not pass the means test their only bankruptcy option will be to file for either Chapter 13 or Chapter 11. The U.S. Trustee will typically change the median income figures twice a year, the recent changes became effective May 1, 2014. The next adjustment to the median income figures are expected to be announced in October or November of this year.
The median income levels used for Chapter 7 eligibility is derived from the Census Bureau and are based on the actual incomes of Florida residents. The median income levels are broken down into family size by geographic region. The median income for Florida residents increased by over 1.46% for all family sizes.
The increased median income will allow more people to qualify for the means test. If your average income over the most recent 6 months is lower than the state median income for a household of the same size as yours, you automatically pass the means test. Thus, the higher Florida’s median income is the greater the likelihood you will pass the means test. If your median income is above Florida’s median income you will need to continue with the means test to determine your eligibility for Chapter 7 bankruptcy. To learn more about the means test click here.
Florida’s Median Income Effective May 1, 2014:
• Household of 1person = $41,939
• Household of 2 people = $52,598
• Household of 3 people = $54,742
• Household of 4 people = $64,122
Florida’s Previous Median Income:
• Household of 1person = $41,334
• Household of 2 people = $51,839
• Household of 3 people = $53,952
• Household of 4 people = $63,196
Change Measured in Dollars:
• Household of 1person = $605
• Household of 2 people = $759
• Household of 3 people = $790
• Household of 4 people = $926