Predictably, as the economy worsens, the Median Family Income numbers used by bankruptcy lawyers to calculate folks eligibility to file Chapter 7 Bankruptcy have gone down. Consequently, it is now a little harder to be eligible to file Chapter 7 Bankruptcy. These numbers go into effect for cases filed on or after November 1st, 2010.
Here they are for Kentucky, with the previous, higher numbers next to them:
Household Size of 1: $36,999 ($37,450)
Household Size of 2: $44,353 ($45,491)
Household Size of 3: $51,046 ($54,488)
Household Size of 4: $62,739 ($64,739)
add $7500 for each additional person in excess of 4
(here is the link to the United States Trustee’s site which contains numbers for all states)
Again, not a surprise, but this means that the means test will likely need to be used in more cases to determine eligibility for Chapter 7 Bankruptcy. Also, the means test is used in Chapter 13 Bankruptcy cases, often, to determine the minimum payment required to be paid to the Chapter 13 Trustee.
The bottom line: It is now more important than ever, when exploring the option of bankruptcy, to discuss your situation with a highly qualified bankruptcy attorney who is very familiar with the law and is proficient in assessing folks eligibility for bankruptcy under the means test. When shopping for a bankruptcy attorney, ask them how many years they have been practicing and how many cases they do monthly. These things are very important as it can make a huge difference whether bankruptcy will ultimately benefit you or not.
John Rogers, Kentucky Bankruptcy Attorney