The poor economy in Michigan has, as of November 1, 2010, forced the median income numbers down again, making it that much more difficult for prospective Chapter 7 Bankruptcy filers to pass the “means test” for Chapter 7 eligibility.
As of November 1, 2010, the new median household income figures for the State of Michigan are:
- For a household of 1, $41,875 per year.
- For a household of 2, $49,919 per year.
- For a household of 3, $59,190 per year.
- For a household of 4, $70,600 per year.
- For households over 4 persons, $70,600 + $7,500 for each additional person over 4.
The “means test” is the mathematical formula inserted into the Bankruptcy Code in the 2005 BAPCPA amendments which states that, if a filing Chapter 7 debor’s entire household earns more money than the median income for a houseold of its size in the state in which they reside, that debtor’s bankruptcy petition is presumed fraudulent. Therefore, a single filer with no one else in his or her household who earns $50,000 per year carries a presumption of fraud in the filing of a Chapter 7 bankruptcy petition.
However, it is not quite so cut-and-dry: the means test allows for various deductions which can often allow someone whose median household income is technically above the figures listed above to pass the test in the end.
If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or firstname.lastname@example.org to schedule a free, initial consultation.