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New York Median Income Drops; Lowers the Means Test Threshold

Recent Census Bureau figures show that the median income of New York families has dropped about 1% in the past half year. For bankruptcy debtors, this decrease may have an effect on both Chapter 7 and Chapter 13 bankruptcies.

In Chapter 7, debtors file a 'means test' form, which calculate their monthly income for the six months prior to filing bankruptcy. If their income, on an annualized basis (that is, the monthly means test income times 12 months) is above the median for a similarly sized family in the state where they filed their bankruptcy, they are considered 'above-median income' debtors and must calculate expenses based on average expenses for various national or local categories. For more information, please see my website on the means test.

In chapter 13, we do the same analysis of income received in the previous six months. A debtor who has above-median income must, at a minimum, file a chapter 13 plan that runs five years, unless all creditors can be paid in a shorter period of time. Debtors whose income is below median may, in certain circumstances, file chapter 13 plans of only three years. More information about chapter 13 is also on my website.

The new median income figures will apply to any case filed after November 1, 2011. The new figures for New York State are as follows (with the current figures in parenthesis afterward):

Family of 1) $45,931 (down from $46,295)
Family of 2) $56,113 (down from $57,777)
Family of 3) $66,953 (down from $68,396)
Family of 4) $81,212 (down from $83,942)

For families of more than four, add $7,500 per person (no change)

Please contact us for a phone analysis of your situation, at no charge.

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