New bankruptcy means test median income figures start April 1, 2014.

On April 1 it will get slightly easier for some middle income Americans to file for bankruptcy. That’s because the semi annual inflation adjustment for the Chapter 7 bankruptcy means test is increasing the median income figures for each state by approximately 1 1/2%.

The means test calculator on LegalConsumer.com has been updated with the new April 1, 2014 median income figures.

While the median income figures are supposed to be based on actual data, this semiannual update is just an across-the-board 1.47% increase for every family size, one through four.
Typically, when these numbers come out, some states go up, and some states go down. Not this time. Median income numbers for all states are rising by 1.47% on April 1.

That means that, no matter where you live, if on March 31 you fell just a half percent below the median income standard, you may well pass the means test as of April 1 because you are below the new median income standard.

For example:

Family of three living in Georgia with a median income of $56,000 a year would fall above the median standards being applied 31st, 2014, but would be below the median for a family of three for the new standards being applied April 1.

There is no way to be sure how many people fall this close to the line of median income who are considering bankruptcy.

About the semiannual means test inflation adjustment:
Twice a year, the administrative office of the US courts adjusts the means test median income figures that are used in form 22A — the means test form for Chapter 7 bankruptcy and Form 22C, the form that determines the length of your plan in Chapter 13, as well as your “projected disposable income” in a Chapter 13 bankruptcy. This year, the median income numbers are being revised April 1, and the national county-by-county expense standards will be revised May 1.

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New Bankruptcy Means Test Expense allowances take effect May 1, 2013

The LegalConsumer bankruptcy means test calculator has been updated to use the expense and income standards that take effect May 1, 2013.

The 2005 Bankruptcy Law Amendments, known as BAPCPA added the means test and requires it to follow the expense standards promulgated by the IRS for use by their collection agents. The IRS updates these expense standards, which are computed separately for each county in the nation.

The LegalConsumer means test calculator applies your county’s updated expense standards based on the zip code you enter and the number of people in your household.

 

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Bankruptcy Means Test Revised Median Income Standards Begin April 1, 2013

20130322-103010.jpgThose Considering filing for bankruptcy should take note of the fact that new median income numbers will apply to the means test for all bankruptcies filed after April 1, 2013.

These numbers can be found at the link below and also on LegalConsumer’s bankruptcy means test calculator which applies appropriate numbers for your state and county.

There you’ll find comparisons between the existing numbers and the new numbers to take effect April 1.

Here is a link to the Justice Department’s original tables.