Filing Chapter 7 Easier After November 1st: MN Median Incomes Rise Despite Covid-19

Higher Median Income for MN

By David Kelly, Minnesota Bankruptcy Lawyer

Why Your Median Income is Important if you are Thinking of Bankruptcy

If your income is below the median for your household size in your state, you can file a Chapter 7 bankruptcy without having to take and pass the means test. I expected that with the Covid epidemic in progress the income numbers would be dropping substantially. At least for the state of Minnesota, this is not what has just happened. They actually went up. Quite a bit up in fact, as of November 1st 2020. This means that many people who may not have been able to file a Chapter 7 bankruptcy earlier will be able to do so now.

Twice a year the Department of Justice updates it’s official median income tables. Numbers are assigned on a state by state and a household size basis, supposedly based on figures from the Census Bureau. A new set of numbers is out for November 1, 2020. The numbers went up at a rate higher than usual. This is a happy surprise.

Are These Numbers For Real?

I can’t help but wonder if somebody is messing with the numbers. Frankly, they don’t look right to me based on what I have been seeing. But I should not be looking a gift horse in the mouth. This helps my clients. It will be a lot easier to file a Chapter 7 bankruptcy in Minnesota after November 1, 2020 than it was before. Another benefit is that if for some reason you need to file a Chapter 13 bankruptcy, having an income below median means that your payment plan can run only three years instead of the usual five years.

Here are the Minnesota median income numbers effective November 1, 2020:

One person:$  61,811 – an increase of $3,761 since April 2020
Two people:$ 81,478 – an increase of $3,776 since April 2020
Three people:$100,430 – an increase of $2,773 since April of 2020
Four people:$118,646 – an increase of $4,320 since April of 2020
Five people$127,646 – an increase of $4,320 since April of 2020
Six people: $136,646 – an increase of $4,320 since April of 2020
Add $9,000 for each individual in excess of 6

Call 952-544-6356 to Find Out How This Helps You

When it comes to eligibility for filing Chapter 7 bankruptcy, or for Chapter 13 if that’s what you need, things are looking up. Now is a good time to contact me for a free telephone consultation to discuss how this helps you.

This post is for general information purposes only and is not legal advice. It does not create an attorney-client relationship. Seek the advice of 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.


Bankruptcy Attorneys Provide an Essential Service

By David J. Kelly, Minnesota Bankruptcy Lawyer


Bankruptcy attorneys are considered to be an essential service. While I have been taking plenty of precautions, such as asking everyone to wear a mask, I am still here and ready to serve. It usually takes several meetings between myself and my clients to properly prepare a case for filing – but many of those meetings can be done by Zoom or telephone or one of the other remote communication platforms. You don’t have to wait. I would be glad to start working with you now. To begin, call me for a free telephone consultation. 952-544-6356.

Covid-19 Update from National Association of Consumer Bankruptcy Attorneys

clorox lawyer

By David J. Kelly, Minnesota Bankruptcy Lawyer since 1976

Just received the following summary from the National Association of Consumer Bankruptcy Attorneys concerning bankruptcy provisions of the Coronavirus Aid, Relief and Economic Security Act” (CARES Act). Here’s what it did:

1. Amended the Small Business Reorganization Act of 2019 (SBRA) to increase the eligibility threshold for businesses filing under new subchapter V of chapter 11 of the U.S. Bankruptcy Code from $2,725,625 of debt to $7,500,000. The eligibility threshold will return to $2,725,625 after one year. Check out our SBRA Resource Page for more information.

2. Amended the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.

3. Clarified that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.

4. Explicitly permitted individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.

I am still here during the Covid-19 Crisis. Lawyers are considered officers of the court. As long as the bankruptcy court is open, and it is, I have to be open too. Still, I am taking every precaution. Don’t be offended if I wipe off the pen you used or anything else you touched, or if I pull my chair back and keep my distance. Also, I am learning how to use Zoom. Already have been using Hangouts and Skype. I prefer Hangouts for virtual face to face; but one can still get a lot done by just meeting remotely by old fashioned telephone. I am limiting actual visits to my office as much as possible.