Michigan Bankruptcy Exemption Limits Adjusted Upward 7% on April 1, 2014

Under Michigan law, exemption amounts stated in the bankruptcy exemptions found in MCL section Mich. Comp. Laws § 600.5451 are adjusted for inflation, on April 1 of every three years since 2005. Adjustments have been made in 2008, 2011, and now 2014.

The new amounts for 2014 are about 7% higher than the old amounts, but rounded to the nearest $25.

The new amounts have been integrated into the LegaConsumer.com Michigan bankruptcy exemption listings found here.

The official document announcing the Michigan inflation adjustments can be found here or here

 

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.

 

Federal Bankruptcy Exemptions Adjusted For Inflation, April 1, 2013

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When Congress passed the 2005 bankruptcy law, it dictated that the limits set in the statute should be adjusted for inflation every three years. Adjustments were made in 2008 2010, and now in 2013. The new amounts to take effect April 1.

Some of the critical affected amounts:

  • Federal 11 USC 522(b) Exemption amounts
    • Homestead exemption raised from $21,625 to $22,975
    • Motor vehicle exemption raised from $3,450 to $3,675
    • Wild-card exemption raised from $10,825 to $11,500
    • Tools of trade exemption raised from $11,525 to $12,250
    • Limit on IRA exemption raised from $1,171,650 to $1,245,475
  • Debt Limits
    • Chapter 13 unsecured debt limit raised from $360,475 to $383,175
    • Chapter 13 secured debt limit raised from $1,081,400 to $1,149,525
  • State Homestead Exemption Limit for Recent Relocatees
    • Homestead exemption cap (for people who have recently moved to states with large homestead exemptions) raised from $146,450 to $155,675

Click here for a complete list of inflation adjusted amounts.

Related Link: Bankruptcy Exemptions In Your State

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.