Massachusetts Chapter 7 Bankruptcy Update: Changes To The Median Income For Means Test
On March 15, 2010 the U.S. Census Bureau changed their Median Family Income figures. This will effect anyone filing for Massachusetts Chapter 7 bankruptcy after March 15, 2010. The new Median Family Income figures will be used for the Means Test to determine eligibility for Chapter 7 bankruptcy.
What is the Chapter 7 Means Test?
According to this article from Nolo:
The means test was designed to limit the use of Chapter 7 bankruptcy to those who truly can’t pay their debts. It does this by deducting specific monthly expenses from your “current monthly income” (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly “disposable income.” The higher your disposable income, the more likely you won’t be allowed to use Chapter 7 bankruptcy.
New Median Income Numbers
The new median income is $53,315 for 1 person, $69,204 for 2 people, $82,297 for 3 people, and $99,293 for a family of 4.
For most people filing Chapter 7 bankruptcy in Massachusetts, the $200 decrease in the median income should not be a huge issue.
For more information on Massachusetts Chapter 7 bankruptcy, watch our video below:
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