Every six months, the income necessary to file a Chapter 7 Las Vegas bankruptcy changes due to the addition of the means test to the bankruptcy code in 2005. In order to file, the debtor’s household income must be below the median state income. The decision to use that number is largely arbitrary, and whether it prevents “the wrong people” from filing bankruptcy has never been evaluated. The medians, of course, change due to inflation and local economies, making it worthwhile to inform debtors who are considering discussing their debt problems with an experienced Las Vegas bankruptcy lawyer. Importantly, those who are ineligible for Chapter 7 can always file in Chapter 13, unless they have very large debts that are usually well beyond what homeowners normally have.
The bi-annual changes to the numbers may influence when and whether someone chooses to file, and starting in November, they will go down, which might make it harder for people to file.
As of now, single earners making more than $44,508 will be ineligible to file bankruptcy in Chapter 7. For families of two, three, or four persons, the numbers are $57,327, $62,776, and $67,236, respectively. For larger families, add $7,500 for each additional family member.
For cases filed on or after November 1, 2012, the new median will be $44,013, which is only slightly lower than the previous one. For families of two, three, or four, the new numbers will be $54,545, $54,545, $65,212, and $7,500 for each additional family member beyond four. That repeated figure is likely a typo on the Department of Justice’s part. Generally, it will be more difficult for earners in larger families to file Chapter 7 bankruptcy in Las Vegas.
The means test is not the only aspect of Chapter 7 bankruptcy that people should know about, so it’s important to know all your options by consulting with an experienced Las Vegas bankruptcy attorney.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.