Bankruptcy Means Test Gets Tougher on November 1, 2010
The bankruptcy means test numbers for Georgia change on November 1, 2010. The Georgia bankruptcy means test income limits are based on the average income of individuals and families.
As everyone knows, the economy has been awful for last three years. As a result, the average income for people has been going down. Ironically, this fact makes the bankruptcy means test limits go down which in turn makes it more difficult for people to get relief from their debts under Chapter 7 and Chapter 13 bankruptcy.
For example, the Georgia median income limit for all bankruptcy cases filed before November 1st was $40,546.00. After November 1st, the limit is 38,748.00. For a two person family, the limit was $55,061 but is now $51,184.00 For a three person family, the limit was $60,887 but is now $55,767.00. For a four person family, the limit was $68,258.00 but is now $68,122.00.
Just because someone is over the bankruptcy means test limits does not mean that you can’t file Chapter 7 bankruptcy. It means that finishing the test will be more complicated and you may not be eligible for Chapter 7 when you get to the end of the test. Here are some expenses that may help someone who is over the bankruptcy means test limits qualify for Chapter 7 bankruptcy:
(1) child support or alimony
(2) charitable deductions (you must be able to back it up with written proof)
(3) 401k contributions and 401k loan payments
(4) daycare expenses
(5) union dues
(6) monthly health insurance premiums and
(7) the amount of your paycheck that goes to state and federal taxes.
To know for sure how you are affected by the bankruptcy means test, you need to sit down with your Georgia bankruptcy attorney and carefully review your gross income for the last six months in addition to the expenses listed above.
In Chapter 13 cases in the Northern District of Georgia, if you are over the bankruptcy means test limits, your case will have to last for five years. To qualify for a three year Chapter 13 plan or any other plan that is less than five years, you must be under the median income limits.
There are exceptions to every rule. Every case is different. For you to truly understand your options, you must meet with a bankruptcy attorney.