Important Changes to the Essential Bankruptcy Numbers

I find myself today (April 14, 2016) in the process of updating what seems like way more than half of the numbers on my website. The Department of Justice just issued a major set of changes. I need to incorporate them into a series of updates. Otherwise about half of my web pages will be obsolete. With a check list of the changes in my hand, I’ve been going through my site page by page trying to find and correct everything that suddenly became out of date.

If you see “Copyright 2016” at the bottom of the page, that’s a good sign that it’s been updated. The ones I haven’t gotten to yet still say “Copyright 2015.”

Every six months, on October 1st and April 1st, the Department of Justice issues new median income numbers on a state by state basis. Those numbers serve as the starting point for the means test, which determines who is eligible for Chapter 7 bankruptcy. In Chapter 13 bankruptcy, the median income numbers determine whether the payment plan will run for 36 months or for 60 months. I have just gotten those numbers updated, and you can now see the new median income numbers for Minnesota on my Chapter 7 page.

The medain income numbers are not the only bankruptcy-related numbers that changed this year on April 1st.  While new median income numbers are issued every six months, there are multiple other sets of numbers which are updated by the Department of Justice only every three years.  That three year mark just came around on April 1, 2016.  Even though that was April Fools’ Day, these changes are no joke.  The changes most important to my practice are the ones they made to the federal exemptions.  You can find the updated federal exemption numbers on my exemptions page.  The federal exemptions in all categories appear to have increased a little, which of course is good news.  My favorite among the federal exemptions, the one we call the “wild card” or the “catch all,” increased from a possible maximum of $12,725 to a possible maximum of $13,100.  I’ve been saying for years that it’s about $13,000, now it really is.

There’s still one more item I need to update on the Filing Process page.  There under “Reasons to Delay Filing” is some material about how it is best to not have charged $650 or more on any one account within the 90 days before filing a bankruptcy, and about how it is best to not have taken a cash advance of $925 or more within the 70 days before filing.  Doing either of those things creates what amounts to a free objection that can be made by the creditor.  The April 1st update for those two numbers increases them to $675 and $950 respectively.  For most of my cases these particular changes make no real difference, since most of my clients have quit using credit many months before they come to see me.

This post is for informational purposes only and does not create an attorney-client relationship.  It is not legal advice.  Please consult the attorney of your choice concerning the details of your case. I am a debt relief agency. I help people file for relief under the federal bankruptcy code.

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