by Craig D. Robins, Esq.
Important Note as of October 18, 2001:
Click link to see new article about: Means Test figures are changing again on November 1, 2011 
New Bankruptcy Means Test Criteria Going Into Effect March 15, 2011 Will Make It Easier for Consumers to Qualify for Chapter 7
The state median income figures that you need to use for the means test change periodically. The last change was on November 1, 2010, and the change before that went into effect exactly a year ago, on March 15, 2010. The change before that was November 1, 2009.
It seems the means test median income figures change twice a year to coordinate with the changes to daylight savings time. I’m not sure what the analogy here is.
The changes last fall actually made it slightly harder to qualify. However, the changes going into effect in two weeks will make it slightly easier for most Long Island consumers.
In order to automatically pass the bankruptcy means test your income must be less than the median income in the state where you live. For New York residents, it will be slightly easier for some families to qualify for Chapter 7 bankruptcy than last year.
The Changes Can Mean Savings of Many Thousands of Dollars for Those Filing for Chapter 13 Relief
For those seeking to file for Chapter 13 bankruptcy, debtors will be fortunate in that many will be able to pay at close to a thousand dollars less each year, or even more than that. A family of four stands to pay about $1,500 less per year, a very significant savings. Considering that a Chapter 13 plan lasts three to five years, that can mean a savings of many, many thousands of dollars.
The figures used for the each state’s median income are based on United States Census data, and adopted by the Office of the United States Trustee. These figures routinely change once or twice a year. Pursuant to 11 U.S.C. § 101(39A)(B), the means test median income data is regularly adjusted, based upon the Consumer Price Index (CPI) for All Urban Consumers.
Usually, income rises each and every year because of inflation, the cost of living, etc. When we were deep into the recession last year, income actually decreased slightly from the prior year. That resulted in lower median income figures which made it more difficult to qualify for Chapter 7, and also required some Chapter 13 debtors to pay more into a Chapter 13 plan.
However, it appears that we may be heading out of the recession as median family income has increased over the past six months. Accordingly, debtors will benefit.
To see the very old and now obsolete median income data for each of the 50 states, go to the U.S. Trustee Census Bureau Median Income Means Test Chart for cases filed between November 1, 2009 to March 14, 2010 .
To see the old data from last year of median income data for each state, which is only good through the end of this week, go to Median Income Means Test Chart for cases filed between March 15, 2010 and October 31, 2010 .
To see the current median income data for each state, which is only good through the end of next week, go to Median Income Means Test Chart for cases filed between November 1, 2010 and March 14, 2011 .
To see the new median income data going into effect next week, go to Income Means Test Chart for cases filed beginning March 15, 2011 .
New, New York Means Test Figures
Family Size of One: If you are a single individual, which means that you have a “family size of one”, the New York median income has increased, from $45,548 earlier this year to $46,295. This is a minor but nevertheless significant change of $747 per year, or about $62 per month.
Family Size of Two: For a family size of two, the new median income figure has increased, from $67,292 earlier this year, to $68,396.
Family Size of Three: For a family size of three, the new median income figure has increased, from $56,845 earlier this year, to $57,777.
Family Size of Four: For a family size of four, the new median income figure has increased, from $82,587 earlier this year, to $83,942.
The Bankruptcy Means Test
This is a comprehensive, very complex series of calculations that the federal government designed to ascertain whether someone qualifies for Chapter 7 filing.
Under the old bankruptcy law, almost anyone could seek to eliminate their debts by filing Chapter 7. The new laws changed that. Click here to take a look at the actual Means Test form .
The Means Test formula is designed to evaluate whether a debtor has the financial means to pay back a substantial portion of his or her debts. If the person does, then he or she may not be eligible to file Chapter 7 bankruptcy , and may instead have to file a payment plan bankruptcy under Chapter 13 .
If debtor’s income is below the New York State median income for a family of that particular size, then passing the Means Test is virtually automatic. If not, the debtor must have a sufficient amount of acceptable deductions permitted by the Means Test.
Impact of New Means Test Figures on Consumers Filing Bankruptcy on Long Island
In my Long Island bankruptcy law practice, I estimate that at least 9 out of 10 clients now seeking to file for Chapter 7 bankruptcy relief do indeed qualify under the means test.
Making the most of qualifying under the means test and making the figures work for you requires that you meet with an experienced Long Island bankruptcy attorney to ascertain eligibility for filing for bankruptcy relief.
New Median Family Income Figures for New York
(Effective for cases filed after 03/15/11)
Family Size Amount
Add $7,500 for each individual in excess of 4.
There Are Many Other Posts About Means Test Issues on this Blog
I’ve written several dozen articles on various issues concerning the bankruptcy means test. You can see them by clicking the category, Bankruptcy Means Test .
Here are some of the more popular posts: