Bankruptcy Means Test Meaner as Family Incomes Drop

As the economy worsens, unemployment rises and family incomes are dropping, getting bankruptcy help gets a little tougher.

The bankruptcy income guidelines go down a few hundred dollars for Kansas cases filed on or after March 15, 2010.  While this change probably won’t disqualify many debtors, the downward trend is disturbing and more evidence the means test is a mean test.

Here are the new Kansas median income figures by family size used for part one of a two part-test to determine bankruptcy eligibility:

  1. $41,210
  2. $57,561
  3. $63,212
  4. $72,352

But do not despair if your income is higher than these numbers and you need bankruptcy help.  You are not automatically disqualified. These numbers are used in part one of the means test to figure out whether Kansans may get rid of their general debts such as credit cards and medical bills in bankruptcy.

You have a second chance to pass the bankruptcy means test by completing a long form listing expenses.  Most clients pass the means test at the end of the day.  Those few who don’t pass, still get substantial bankruptcy relief by stopping interest on general debts and making a partial repayment based upon their disposable income.

It is ironic that help is harder to get as median incomes fall.  We can only assume that lawmakers did not contemplate the recession when the bankruptcy means (income) test was devised in 2005.

We are experienced in filling out the means tests forms and will work to get you the best means test result the law allows.

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.