Earlier this year, I posted that median incomes for New Jersey families were going down, and that that could affect whether some New Jerseyans could file a chapter 7 bankruptcy. This is because of Means Testing, a provision added to bankruptcy law in 2005, that compares a debtor's gross income to the median income for that state for the debtor's family size. If your income exceeds this median income, then a further analysis is done to see whether you have sufficient money left over to pay to creditors over time, after deducting some standard and non-standard living expenses. These figures are adjusted periodically, and with unemployment and the bad economy, they have actually been going down. They will be adjusted again as of November 1, 2010, so those people close to the median may find themselves in some difficulty with a chapter 7 filing.
- Household of 1: $59,812 to $58,107 (Drop of $1,705.44)
- Household of 2: $71,744 to $69,539 (Drop of $2,204.84)
- Household of 3: $85,764 to $84,192 (Drop of $1,571.78)
- Household of 4: $102,894 to $99,474 (Drop of $3,419.62)
This downward trend of median incomes should encourage anyone thinking about filing a chapter 7 bankruptcy to contact an attorney right away. If you are a New Jerseyan thinking about taking this step, please call my office for a free consultation.