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:
|$ 61,811 – an increase of $3,761 since April 2020
|$ 81,478 – an increase of $3,776 since April 2020
|$100,430 – an increase of $2,773 since April of 2020
|$118,646 – an increase of $4,320 since April of 2020
|$127,646 – an increase of $4,320 since April of 2020
|$136,646 – an increase of $4,320 since April of 2020
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.