The United States Department of Justice recently released adjusted figures that apply for the bankruptcy means test, which is a test that is required for above-median debtors to see if they qualify for chapter 7. These figures apply to cases filed this month or afterward. The income is a function of household size, based on doubling the prior six months to annualize it. In Minnesota, the median income is now $50,934 for a household of one, $66,566 for a household of two, $81,044 for a household of three, $94,807 for a household of four. Add $8,100 for additional persons.

Below-median debtors are pretty much automatically qualified for chapter 7. Above-median debtors need to go through a complicated budgeting process, utilizing figures that have also been updated. The means test is in a way similar to, yet distinctly different from, a debtor’s actual budget, which also must be submitted as part of the chapter 7 process to show a person cannot afford a chapter 13 plan. Getting a good, experienced lawyer to assist with the means test is critical. I have had many clients who have come to me for a second opinion after being advised they could not beat the means test, and we got their case to go through.

Exactly why the Department of Justice (which is a party to bankruptcy proceedings) officially publishes these figures rather than an independent government agency, is a question that has not been answered for me.