Every six months the United States Department of Justice releases new Median Family income figures for each state and territory. These figures are used to calculate a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If a debtor's income is greater than the median income for their state of residence and family size, they many not be able to file a Chapter 7 bankruptcy case.
The Means Test calculation compares the average monthly income (as calculated over the last six (6) months) to the median family income in a debtor's state for a household of their size. If the average monthly income is lower than the median family income for the debtor's state of residence and family size, then they pass the means test and there is a presumption that they may file for Chapter 7 relief.
The Median Family Income for Massachusetts as of November 1, 2012 were as follows:
Family size 1: $54,475 per year
Family size 2: $66,076 per year
Family size 3: $80,822 per year
Family size 4: $101,523 per year
add an additional $7,500 per year for each additional household member.
These figures went down slightly in each category from these figures.
The Median Family Income for Massachusetts as of April 1, 2013 are as follows:
Family size 1: $55,602 per year
Family size 2: $67,443 per year
Family size 3: $82,495 per year
Family size 4: $103,624 per year
add an additional $8,100 per year for each additional household member.
If your income is greater than the median income for your state of residence and family size, you still might meet part (b) of the means test after taking into consideration certain expenses as defined by the Bankruptcy Code and other deductions, including regular charitable donations (up to 15% of your income), school expenses, payments on 401(k)/IRA loans, and health Insurance. If you are subject to this calculation an attorney can help you perform this task.
Click here to learn more about The Means Test or use our Means Test Calculator.
To have an attorney help you with these calculations call 508.655.5980 to schedule a consultation or e-mail us here.