A term you might often hear when discussing or researching information about bankruptcy is “median family income.” If you do not know what this means you are not alone. However, the Median Family Income in Ohio amount is very important. It determines whether you qualify to file Chapter 7 Bankruptcy. It also determines the length of your repayment plan in a Chapter 13 Bankruptcy case.
The current monthly income test looks at the average gross family income for the six months before you file your case. The average gross income is then multiplied by 12 to get an annual figure. Then this amount is compared to the Median Family Income in Ohio for a similar household size.
Median Family Income
The median income figures change about two or three times each year, once or twice in the spring and once in the late fall. 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 most recent changes went into effect Saturday, April 1, 2017 and apply to cases filed between April 1, 2017 and April 30, 2017. These numbers will change again on May 1, 2017. The income levels depending on your household size are:
- 1 person household: $46,242
- 2 person household: $57,938
- 3 person household: $68,361
- 4 person household: $83,040
- Add $8,400.00 for each individual in excess of 4
What these numbers mean in practice. If you are living by yourself and make $46,242 or less a Chapter 7 bankruptcy should work. The Bankruptcy Court will also look at your monthly budget. They look to see if you have any disposable income left over at the end of the month. 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.