As many of you know, one of the bankruptcy eligibility threshold factors to determine which chapter of bankruptcy one may file under (e.g. Chapter 7, chapter 11, or chapter 13) is the dreaded “means test” which uses income received in the six calendar months prior to filing your case and compares that to the census bureau’s “Median Income” for your State.
For the second period in a row, due to the declining economy, the median income is dropping and will go into effect for cases filed after October 31, 2010. Thus, depending on how close you are to the limit, it may be important to file your case before November 2010.
In California, the median income for a 1-person household will be reduced to $3,936 per month; for 2-persons, $5,162 and a family of 4, $6,466.
Be sure to discuss the timing of your bankruptcy case with your attorney to maximize your chances of qualifying for Chapter 7 if possible, or reducing your obligations in a Chapter 13 case.