Any New Jersey resident filing bankruptcy since 2005 has had to go through a process called "means testing" in order to qualify for a chapter 7 or determine possible minimum payments in a chapter 13 plan. If your gross household income is under the median for New Jersey for your household size, you will have a much easier time of it. These medians are based on census data and adjusted periodically for inflation. Well, there is some good news for people looking to file who are hovering at the borderline: the median income figures are going up!
Yes, that's right. On May 1, 2012, the median income figures will be going up for all family sizes, 3% for 1 to 7 people, 2% for 8, and none after that. What does this mean to you? Well, just take a look at the changes in terms of dollars for the various household sizes.
- One person: $60,322 to $62,226
- Two people: $67,503 to $69,634
- Three people: $84,896 to $87,576
- Four people: $101,957 to $105, 175
- Five people: $109,457 to $112,675
Even if you are still over the median for gross income, there is still good news. Many of the standardized expense deductions in means testing are going up as well! This means that if you are over the median, and have to calculate cash flow, you can deduct more for standard expenses. I have a client now whose minimum chapter 13 plan payment under means testing stands to drop $135 per month if they wait until May to file.
If you are thinking about bankruptcy but are worried that you might not "qualify" for a chapter 7, call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your options. A financial fresh start might be just the thing to kick off your summer!