What does a median income mean in a chapter 7 bankruptcy? 30 Answers as of June 25, 2013

I was looking into chapter 7 bankruptcy, and I keep seeing rules about my "median income." What does median income mean? How does it affect my ability for file for chapter 7? I currently make $42,000 per year, which I don't think is exceptionally high, but now I'm worried that I can't file bankruptcy because I have a job! I have so much debt from my younger days when I was stupid and ran up credit card debt, I should get the same opportunity to file for bankruptcy as anyone else.

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The Salas Firm
The Salas Firm | Ron Salas
If that is your total income you should be fine depending on the county you live in. For example in Larimer county, the median income for a single person is right at $47,000.00.
Answer Applies to: Colorado
Replied: 9/29/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
The median income in california for a single person is approximately $48000 per year. If you make $42000 then you are under the median income and you can file ch 7.
Answer Applies to: California
Replied: 9/24/2011
Bankruptcy Law Center
Bankruptcy Law Center | Bill Zurinskas
The means test in Colorado sets the median family income for a family of one at $48,598, therefore (assuming you are not married) your income level will not prohibit you from filing a chapter 7 bankruptcy.
Answer Applies to: Colorado
Replied: 9/22/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Median income is a statistic used in calculating eligibility to file chapter 7. It is defined as an annual amount of income for which half the person of your family size makes more than and half make less than. For example, an individual with no dependents would be below the median income in they make $42,000 a year. An individual making $70,000 would be above the median. You can still quality for chapter 7 if you are above the median if you have enough deductions in the calculation. You should consult an attorney to find out if you qualify for chapter 7 or chapter 13 in the alternative.
Answer Applies to: California
Replied: 9/21/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
At 42k you have no worries in California. Getting the form filled out right might be an issue....
Answer Applies to: California
Replied: 9/21/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    It's the median income in your state for the number of people in your household. You can find yours on the US Trustee's website.
    Answer Applies to: Washington
    Replied: 9/21/2011
    Law Office of John C. Farrell, Jr.
    Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
    You should consult with a bankruptcy attorney to see if you qualify. The median test is complicated to explain is this forum. You can probably look into debt settlement as well. That way you can settle the debt for less than what is owed.
    Answer Applies to: Massachusetts
    Replied: 9/21/2011
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Depending on where you live in New York, your "median income" will be considered a little different. Also, your median income changes depending on how many children you have and how many people are supported in your household. If your income is higher than the median income for your area, then your attorney can try to further qualify you for Chapter 7 by applying the "means test" to your current income. If your gross income is $42,000 per year and you are single person, then you would still qualify in most of the downstate counties.
    Answer Applies to: New York
    Replied: 9/21/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    The median income is used for the Current Means Income test. It is obtainable at the US Bankruptcy Trustee website. It is the "average" income in your area, for example right now the median income for one person in MI is $42,562. It is the starting point to see if your filing is presuming to not be abusive, or if you have disposable income that should mean you file a Ch 13 rather than 13.
    Answer Applies to: Michigan
    Replied: 9/21/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Bankruptcy involves a means test. You need a lawyer to properly calculate it as it is complex. You can initially fail by making too much, but may at that income level possibly still pass using legitimate adjustments a lawyer will understand.
    Answer Applies to: Georgia
    Replied: 9/20/2011
    Grace Law Offices of John F Geraghty Jr.
    Grace Law Offices of John F Geraghty Jr. | John F. Geraghty, Jr.
    Consider Chapter 13.
    Answer Applies to: Georgia
    Replied: 6/25/2013
    Heupel Law
    Heupel Law | Kevin Heupel
    Median income is the annual household income that allows someone to file Chapter 7 bankruptcy. If your gross annual income is less than $46,000 and you are a household of one, then you qualify to file Chapter 7.
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    Median income is the central component of the Means Test. The Means Test determines whether you qualify for filing under Chapter 7 of the Code, or rather have to file under Chapter 13. Currently median income for a household size of one in the metro area is about $48000. You should qualify for a Chapter 7, but a careful analysis by a BK attorney is necessary to be sure. 7
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Braunstein Law, PC
    Braunstein Law, PC | Jacob Braunstein
    When filing bankruptcy, a debtor's income is important for determining whether the debtor is eligible for Chapter 7 bankruptcy or whether the debtor must file a Chapter 13. For example, if a debtor is single with no dependents and the debtor's income is below the median income for a family of one (in his or her jurisdiction), generally the debtor will be able to file a Chapter 7. If the debtor's income is above the median income for a family of one, the debtor may need to file a Chapter 13.
    Answer Applies to: Oregon
    Replied: 9/20/2011
    Stuart Jon Bierman  Attorney at Law
    Stuart Jon Bierman Attorney at Law | Stuart Jon Bierman
    It's best to discuss this in person with an attorney, but in general in NJ a single person with no dependents can make up to $52,000.00 and easily qualify for bankruptcy. In general, people who earn more than the median income can also still qualify for bankruptcy but depending upon their circumstances.
    Answer Applies to: New Jersey
    Replied: 9/20/2011
    North Sound Law, PS
    North Sound Law, PS | Spencer Bergstedt
    The first step in the Chapter 7 bankruptcy involves comparing your income to a family the same size as yours in your state, i.e., median income. Median income levels vary by state and household size, and each county and metropolitan region has different allowed amounts for categories of expenses: basic necessities, housing, and transportation. The first step is simple: If your current monthly income is less than the median income for a household of your size in your state, you pass. Period. You're done. You do not need to complete the rest of the means test. You can file for Chapter 7. If you earn more than the state median, the means test computations get much more complex to determine whether you can file under Chapter 7.. You must determine whether you have enough income left over (called "disposable income"), after paying your "allowed" monthly expenses, to pay off at least a portion of your unsecured debts (such as credit card bills). If your disposable income adds up to more than a certain amount, you fail the means test and cannot file for Chapter 7 bankruptcy.
    Answer Applies to: Washington
    Replied: 9/20/2011
    Florio Law Firm, PLLC
    Florio Law Firm, PLLC | Amber Morgan Florio, Attorney at Law
    A median average income is the median income for all households in the state of Texas. This number will go up or down depending on how many people live in the household with you. If you are single person household, and make $42,000 you are likely right at the cut off point. The Texas Median Average Income for a one person household is roughly $38,000. However, there are additional considerations that you may be able to take into effect when filing a Chapter 7. The Means Test is available to look at other expenses you may have and perhaps you will still qualify to file a Chapter 7 through the Means Test. Further, if there are other individuals living with you (mother, roommate, spouse, child, etc.) then you no longer have a one person household. The Median Average Income is based on the number of people within your household. In other words, Median Average Income for a 2 person household is higher than a one person household. It would be wise to seek a FREE consultation with a Bankruptcy Attorney to assess whether you are eligible to file a Chapter 7, by being under the median average income for your household or by the Means Test. Most firms offer Free Consultations and the attorney can give you this analysis at the consultation with no obligation to go forward.
    Answer Applies to: Texas
    Replied: 9/20/2011
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    Median income means that for your family size and the state in which you file, there is a means test which determines your ability to file for a Chapter 7. You would neeed to make sure that you fall within the means test. You can still file a 13 if you do not qualify for the 7.
    Answer Applies to: Utah
    Replied: 9/20/2011
    Law Office of Andrew Harris
    Law Office of Andrew Harris | Andrew Harris
    Median Income is the average income for the county in which you reside. If you go over that amount, you may not be able to file a Chapter 7. There are many factors in calculating that means test. The best thing for you to do is meet with a bankruptcy attorney and provide him with your last 7 months of paystubs. He or she should be able to tell you if you pass or not.
    Answer Applies to: Oregon
    Replied: 9/20/2011
    Eranthe Law Firm
    Eranthe Law Firm | Cate Eranthe
    You can file for bankruptcy with a job. The means test is based on the median state income which you can find on the United States Department of Justice website. It means that if you earn more than that amount the presumption of abuse is raised if you file a chapter 7 bankruptcy. You can rebut the presumption which is too complex to explain in this forum. For a single earner in California the median income is $48,009 a year before taxes. So if your $42,000 annual income is gross, you pass the means test and the presumption of abuse is not raised.
    Answer Applies to: California
    Replied: 9/20/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Your situation requires more analysis than can be done in a simple email. The median income is dependent upon family size but whether or not you qualify is more complex than that.
    Answer Applies to: California
    Replied: 9/20/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    The current gross (before taxes and deductions) median income in CA for a "household size" of 1 is $48,009. The figure changes periodically, so don't rely on archived answers! "Median" is the middle point: half the persons in the state earn more; half the persons earn less. If your income is below median, it is easier to qualify for chapter 7 bankruptcy, and alternatively, you may have a shorter payment period if you file chapter 13. That does not mean your income has to be below median in order to file chapter 7, and it does not mean that you necessarily qualify for chapter 7 if your income is below median. Bankruptcy is not one-size-fits-all and it is necessarily income-centric. It is also necessarily discriminatory: persons of greater means are treated differently.
    Answer Applies to: California
    Replied: 9/20/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    Median income is the income ceiling established from IRS regulations to determine whether you qualify for filing a chapter 7. There are many variables like number of people in your household, mortgage and other secured debt payments.
    Answer Applies to: Georgia
    Replied: 9/20/2011
    Law Office Of Magnolia Zarraga
    Law Office Of Magnolia Zarraga | Magnolia Zarraga
    Median income is a test that Congress in its infinite wisdom created back in 2005. So now anyone who files bankruptcy must fall below state median income for their household size. It is basically an average of your gross income over the last six months. If that figure is above the state average, then your attorney must work harder to get you to qualify by taking certain qualifying deductions. If your income is below the state average then there is a presumption that your case is not abusive and you can file a chapter 7. Some people make too much money and even with certain deductions their income for their household size will always be above the state median, if so, you can't file a chapter 7 or it would be presumed abusive, but you can file a chapter 13 where you propose to repay a part of your debt. Currently making $42,000 per year gross is not above ca state median income even if your household size is one. However you need to consult a bankruptcy attorney to make sure that you otherwise qualify for bankruptcy and that the paperwork gets done correctly.Good luck
    Answer Applies to: California
    Replied: 9/20/2011
    Law Office of Eric Ridley
    Law Office of Eric Ridley | Eric Ridley
    You likely do have the same opportunity as everyone. The median is simply the median income for people in a geographic area. Even if your income is above that level, you will very likely qualify to file. I recently qualified a client for Chapter 7 who earned in excess of $200,000 per year. We were able to do this because of this client's unusually high expenses. You need to call my office or another bankruptcy attorney, have a professional evaluation of your circumstances, run your numbers through the means test, and get a legal opinion.
    Answer Applies to: California
    Replied: 9/20/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The median income is the income you are allowed to make each year and, if your income is under the median, you are presumed to have no ability to repay your creditors and therefore can file a Chapter 7 and are not required to file a Chapter 13. The median income depends on the number of members of the family there are and the state where you live. For example, in California, a single person currently can have a median income of $48,009 or less and be qualified to file a Chapter 7. If there are dependents, the income numbers are higher. The income is calculated using the total income received in the full six months prior to filing times two (to get a yearly number).
    Answer Applies to: California
    Replied: 9/20/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    In California, you need to fall within the median income for your household size. This would be the income most individuals in your same household size earn. There is a chart that gives the median incomes necessary to qualify for bankruptcy. You will have to make sure you are within that median income to qualify for your bankruptcy.
    Answer Applies to: California
    Replied: 9/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    You must make less than certain amount to pass.
    Answer Applies to: California
    Replied: 9/20/2011
    Selleck Legal, PLLC
    Selleck Legal, PLLC | Stacey Selleck
    With median income an attorney will look at your last 6 months of income to determine what your current household annual income is. Your household size and all household income is used to determine this. I would suggest contacting an attorney to make sure that you qualify and meet the "means test" for a chapter 7 bankruptcy.
    Answer Applies to: Michigan
    Replied: 9/20/2011
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