New York Bankruptcy Means Test Changes 2018Monday, April 16th, 2018, 3:00 am
In order to file Chapter 7 bankruptcy in New York, you must first pass a means test. If you make more than the median income in New York, a means test determines if you qualify to file for bankruptcy.
However, as of April 1, 2018, the income and expense numbers have increased.
This means that more individuals may be exempt from the means test going forward.
Let's take a look at what the New York Chapter 7 means test is, as well as the new requirements put in place.
What is the New York Bankruptcy Means Test?
The Chapter 7 means test is a system used to determine if Chapter 7 or Chapter 13 bankruptcy is right for you. The means test looks at your income and allowed monthly expenses to determine if you're able to pay back a portion of your debt through Chapter 13.
However, individuals below the median New York income do not need to go through the means test process. Instead, they automatically qualify.
Your income includes any amount of money you have coming in. It is not limited to your salary you get from your job. Instead, income can include things like retirement plans, pensions, unemployment income, rental income, and more.
The acknowledged expenses include a national living allowance for things like food, apparel, personal care, and other miscellaneous items. There is also a national health allowance. These expenses will be deducted from your income to determine how much money you have left over and whether or not you can use this to pay your debts.
What Changes Have Been Made?
As of April 1, 2018, both the New York median income and national allowances have increased.
Here is what the New York median income is as of April 2018:
- 1 Person – $53,132
- 2 People – $68,087
- 3 People – $80,840
- 4 People – $98,583
- 5 People – $106,983
- 6 People – $115,383
- 7 People – $123,783
- 8 People – $132,183
- 9 People – $132,183
For every additional person, you can add another $8,400.
Passing the New York Means Test
If you make above the new New York median income, you will need to pass the means test to file Chapter 7 bankruptcy. For assistance through this process, and to discover if Chapter 7 bankruptcy is really right for you, contact Michael F. Kanzer & Associates, P.C.