New Median Family Income Numbers
What is the Median Family Income?
A term you often hear when discussing or researching bankruptcy is “median family income” and “means test.” If you do not know what this means you are not alone. It can be quite confusing. However, the median family income amount is very important. The new median family income numbers will help determine whether you qualify to file Chapter 7 Bankruptcy.
Before the median family income amount comes into play we first look at the current monthly income test. This test figures out the average gross family income for the six months before the month when you file your case. The average gross family income is then multiplied by 12 to create an annual figure. Then this amount is compared to the Median Family Income in Ohio for a similar household size.
New Median Family Income Numbers
The median income figures change about two or three times each year. In some cases it is beneficial to wait a month or two to file your case in order to make sure the numbers work. According to the United States Department of Justice the new median family income numbers change on November 1, 2016 for cases filed on or after this date. These new amounts based upon your household size are:
- 1 person household: $45,666
- 2 person household: $57,216
- 3 person household: $67,509
- 4 person household: $82,005
- Add $8,400 for each individual in excess of 4
What do these numbers really mean? If you are live by yourself and make $45,666 or less a Chapter 7 bankruptcy should work. Even if your income is greater than the numbers above you can still qualify for a Chapter 7 case. You look to see what your disposable monthly income is for this same period of time. The Bankruptcy Court will also look at your monthly budget to see if you have disposable income.
You do not want to file a bankruptcy case and hope that it will work out. Knowing how your annual gross pay relates to the median family income will help your Chapter 7 bankruptcy case be successful from the beginning.