In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which among other things made it harder for people to file bankruptcy in Chapter 7. The banks feared that people were abusing the bankruptcy system by discharging their unsecured debts even though they could make the regular payments. As a result, the new law requires that people filing bankruptcy make less than their state’s median income in order to qualify for Chapter 7. If their incomes were greater, i.e. they failed the means test, then they would have to file in Chapter 13 or Chapter 11.
For those filing bankruptcy in Las Vegas under Chapter 7, it’s important to know that the numbers change roughly twice per year. This can influence whether it will be possible for you to file should you so choose. Thankfully, the U.S. Department of Justice provides the current and new numbers that will go into effect in November.
As of now [http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm], single earners making more than $43,041 will be ineligible to file bankruptcy in Chapter 7. For families of two, three, or four persons, the numbers are $57,541, $60,783, and $70,509, respectively. For larger families, add $7,500 for each additional family member.
For cases filed on or after November 1, 2011 [http://www.justice.gov/ust/eo/bapcpa/20111101/bci_data/median_income_table.htm], the new median will be $43,146, which is only slightly higher than the previous one. For families of two, three, or four, the new numbers will be $55,573, $60,855, $65,179, and $7,500 for each additional family member beyond four. Apparently, it will be easier for earners in larger families to file Chapter 7 bankruptcy in Las Vegas.
The means test is not the only aspect of Chapter 7 bankruptcy, so it’s important to know all your options by consulting with an experienced Las Vegas bankruptcy attorney.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-880-5554 today!