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Bankruptcy Median Income for Michigan Changing

Posted by Peter Behrmann, Esq. On October 30th

Bankruptcy Median Income for Michigan Changing November 1, 2012

 

Come November 1, 2012, the Median Income for Michigan used for bankruptcy eligibility will be changing once again.  The Median Income last changed May 1, 2012. The Median income figures are used in figuring out the first part of the “Means Test” that is required when figuring out if you are eligible for Chapter 7 Bankruptcy, or for figuring out in Chapter 13 Bankruptcy if you will be required to commit to a 36, or a 60 month repayment plan.

 

Michigan Median Income Figures:

 

Family Size

 

1 Person

2 People

3 People

4 People

Current Median

$45,056

$51,660

$60,313

$72,454

After November 1st

$44,116

$51,554

$60,464

$72,366

*Plus 7,500 for each person over 4

 

Chapter 7 – Median Income

 

In a Chapter 7 Bankruptcy, the Median Income figure is used to see if you pass the first part of the Means Test.  For example, a single guy making $60,000 per year would not pass the Median Income portion of the Means Test and would most likely have to file a Chapter 13 Bankruptcy.  Whereas, a family of four people making $60,000 per year would most likely pass the Means Test and be eligible for a Chapter 7 Bankruptcy.

 

Chapter 13 – Median Income

 

In a Chapter 13 Bankruptcy, the Median Income figure is used to determine your commitment period to the bankruptcy.  For example, a single guy making $60,000 per year would have a commitment period of 60 months if he was to file a Chapter 13 Bankruptcy.  Whereas, a family of four people making $60,000 per year would have a commitment period of 36 months if they were to file a Chapter 13 Bankruptcy.

 

Impact of the New Median Income Figures

 

The impact of the new Median Income figures is that less people will now be eligible to file Chapter 7 bankruptcy then prior to November 1, 2012. For people looking to do a Chapter 13 Bankruptcy, less people will be eligible for a shorter 36 month, over the longer 60 month commitment period.  The largest change is the Median Income for a single individual which is dropping to $44,116, almost a $1,000 decline.  What this means is that single individuals in Michigan are simply making less money than they were six months ago.

 

 

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

“H” is for Household Median Income

Posted by Peter Behrmann, Esq. On March 19th

“H” is for Household Median Income

 

Household median income is an important part of any bankruptcy analysis.  During your free consultation at my Livonia, Michigan Bankruptcy Law Office, I always figure out what your household income is to determine how your income relates to the Household median income for the state of Michigan.

 

The following are the current household median income figures for the state or Michigan.

 

Michigan Household of 1$43,677 Household of 2$50,079 Household of 3$58,467 Household of 4$70,237

 

 *Add $7,500 for each individual in excess of 4.

 

Your household income is important in both a Chapter 7 and a Chapter 13 Bankruptcy

 

In a Chapter 7 Bankruptcy, your household income is the first test in figuring out if you are even eligible for Chapter 7 relief.  For example, a single guy making $65,000 per year is most likely not eligible for Chapter 7.  However, a married couple with three children making $65,000 per year should be eligible for Chapter 7 Bankruptcy relief.

 

In a Chapter 13 Bankruptcy, your household income is the first test in figuring out if you Chapter 13 payment plan will be 36 or 60 months.  For example, a single guy making $65,000 per year would be in a Chapter 13 Bankruptcy for 60 months.  However, a married couple with three children making $65,000 per year could complete a Chapter 13 in just 36 months.

 

Like anything in Bankruptcy the above are not bright line rules, there are exceptions and this is just one of the reasons you should consider using a law firm like ours that practices exclusively in the field of Chapter 7 and Chapter 13 Bankruptcy. 

 

Photo Credit  TooFarNorth

Peter Behrmann is a Michigan bankruptcy attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.

 

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