Bankruptcy Attorney Can Help With the Means Test When You File For Bankruptcy
In bankruptcy many people wonder why your bankruptcy attorney wants to know how much you make and even how much your spouse makes. The reason is because Congress says it matters. In 2005, Congress enacted the BAPCPA which was the Bankruptcy abuse prevention and consumer protection act. And this fact is neither, that is preventing bankruptcy abuse or protecting consumers. Congress enacted this thinking that above average earners were abusing the bankruptcy system when filing chapter 7. Their idea was to force above wage earners into Chapter 13 bankruptcy cases and make them pay the debt back over five years. By this thought, they believe any above average earner that these sides to file for bankruptcy under Chapter 7 is abusing the system. Congress came up with a way to determine who is an above average wage earner. They call that the median family income that includes the size of the debtor’s family. The median family income is figured out semi annually by the Census Bureau. The median family income means the income for which half the families make more and half the families make less. The median income is determined by a state by state basis. Median family income also adjusts for the size of the family. So family of four is deemed to have a higher family income than a family of two. This is sometimes bad as a childless couple working may have just as much income as a family of four with two children. Each additional person results in an increase in the median family income for the means test purposes. It’s always an option to visit a local bankruptcy attorney to see if you qualify under the means test.
