Bankruptcy Income Guidelines to Increase Slightly October 1

It will be a little easier to qualify for bankruptcy relief when the income guidelines used for eligibility increase slightly on October 1.  A single Kansas earner will be able to make $894 more per year and qualify for chapter 7 bankruptcy relief.  A family of four will be allowed a $2036 more income per year in Kansas.

Here are the “means test” figures now in effect and the figures approved by the U.S. Trustee for bankruptcy cases file on October 1, 2008, or after.

• 1 earner                       $38,594      $39,488
• 2-person families    $52,989      $54,070
• 3-person families    $58,075      $60,906
• 4-person families    $69.831      $71,867
• 5-person families    $76,731      $78,767
• 6-person families    $83,631      $85,667
• add $6,900 for each additional person

These figures come from the U.S. Census Bureau for each state and family size.  They are recalculated annually and adjusted for changes in the consumer price index, then adopted by the U.S. Trustee for bankruptcy purposes.

Debtors filing a bankruptcy petition must fill out a “means test” form to determine their ability to repay their unsecured debt.  You pass the means test if your income is less than the median income figures on this chart.  It is not quite that simple, though, because there are all sorts of legal arguments over the definition of family size and what counts as income.

See my post and other information on means testing on the Bankruptcy Law Network.  If you have primarily non-consumer debt, you may be exempt from the means test.

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