Chapter 7 means test

The U.S. Trustee’s Office recently announced changes to the median income used in the Chapter 7 means test. This is significant since all Chapter 7 petitioners must pass the Chapter 7 means test in order to qualify for Chapter 7 bankruptcy. If an individual does not pass the means test their only bankruptcy option may 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 November 1, 2014. The next adjustment to the median income figures are expected to be announced in April or May of this year.

Chapter 7 Means Test

The median income levels used for Chapter 7 eligibility are derived from the Census Bureau and based on the actual incomes of Florida residents. The income levels are broken down into family size by geographic region. The median income for Florida residents increased for most family sizes, with the most significant increase going to families with 4 or more in a household. However, the median income for a household of two people actually fell by 1.93%

The increase in 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. Therefore, the higher Florida’s median income is the greater the likelihood you will pass the means test. Conversely, 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 contact a bankruptcy law firm in Tampa for assistance.

New Median Income Levels for Means Test

Florida’s Median Income Effective November 1, 2014 for Chapter 7 Means Test

  • Household of 1 person = $42,036
  • Household of 2 people = $51,584
  • Households of 3 people = $57,052
  • Household of 4 people = $66,461

Florida’s Previous Median Income for Chapter 7 Means Test

  • A Household of 1 person = $41,939
  • Household of 2 people = $52,598
  • Household of 3 people = $54,742
  • Households of 4 people = $64,122

Change Measured in Dollars:

  • Household of 1 person + $97
  • Households of 2 people – $1,014
  • Household of 3 people + 2,310
  • Household of 4 people + 2,339

Change Measured in Percentages:

  • Household of 1 person + 0.23%
  • Household of 2 people – 1.93%
  • Households of 3 people + 4.22%
  • Household of 4 people + 3.65%

 

Bankruptcy Law Firm in Tampa

If you are having a difficult time meeting your financial obligations contact  Florida Law Advisers, P.A. to speak with a Tampa bankruptcy attorney. Our Tampa bankruptcy attorneys have years of experience helping people just like you solve their financial problems and obtain a fresh start. We understand that these are very difficult times and we are here to help. Florida Law Advisers, P.A., is a customer service oriented firm committed to providing personalized attention and dedicated legal counsel. Call us now at 800 990 7763 to schedule a free consultation with a Tampa bankruptcy lawyer at our firm.

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