The income figures used to determine whether or not a person qualifies to file Chapter 7 bankruptcy changed yesterday.
The United States Trustee Program has posted new “Census Bureau Median Family Income By Family Size” figures that apply to bankruptcy cases filed on or after November 1, 2009.
A review of the new numbers shows that the median income for Oklahoma households of 1 and 3 persons has increased which will make it a little easier for Oklahoma households of those sizes to qualify for Chapter 7 bankruptcy. Unfortunately, Oklahoma households of 2 and 4 or more people will find it a little harder to qualify for Chapter 7 bankruptcy as the median income for those size households has decreased.
The new median income figures for Oklahoma households are:
- $39,068 (1 person household)
- $50,891 (2 person household)
- $54,522 (3 person household)
- $62,037 (4 person household)
*Add $6,900 for each individual in the household over 4.
If a person’s household income falls below these income levels, he/she passes the Means Test and automatically qualifies to file a Chapter 7 bankruptcy.
Most types of income are counted toward these figures, but a few types of income are excluded such as Social Security income.
A person whose household income exceeds these figures may still qualify for Chapter 7 bankruptcy if he/she has enough allowable expense deductions to offset his/her above median income.
A person who fails the Means Test and does not qualify to file Chapter 7 bankruptcy may choose to file a Chapter 13 bankruptcy instead. In this situation, a 60-month Chapter 13 plan must be proposed unless a 100% payback to unsecured creditors can be accomplished in fewer than 60 months.
If a person passes the Means Test but voluntarily chooses to file a Chapter 13 bankruptcy instead of a Chapter 7, he/she may propose only a 36-month Chapter 13 plan.
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