New Arizona Means Test Numbers – Do You Still Qualify for Chapter 7 Bankruptcy?

Introduction

Starting on November 15, 2013 there will be updated means test numbers here in Arizona for chapter 7 bankruptcy filers.  What does this mean?  Let me back up and start with what the “means test” is.

Back in 2005 Congress, in its infinite wisdom, decided that they wanted more people to file chapter 13 bankruptcy rather than chapter 7 bankruptcy.  The way they hoped to accomplish this was limiting chapter 7 bankruptcy to those at or below a certain income level.  Household size is also taken into account when determining if you qualify for chapter 7 bankruptcy.

Periodically these numbers are updated and that will happen here in Arizona on November 15, 2013.  As this may impact the ability of some families to file a chapter 7 I wanted to share these new numbers with you.  Here are the updated income limits and household size for people living in the State of Arizona:

Household Size Annual Income Monthly Income
1 Person $41,993 $3,499
2 People $55,022 $4,585
3 People $56,503 $4,709
4 People $64,604 $5,384
5 People $72,704 $6,059
6 People $80,804 $6,734
7 People $88,904 $7,409
8 People $97,004 $8,084

 

For each household member after eight (8) you add an additional $8,100 per year or $675 per month.

So based upon this charge in order for my family – there are eight of us – my annual income must be $97,004 per year or less or $8,084 per month or less in order to be able to qualify for a chapter 7 bankruptcy filing.

What If I Make Too Much for a Chapter 7 Bankruptcy?

If you make more than the allowed amount under the means test you still may be able to file a chapter 7 bankruptcy.  There are dozens of deductions we can make to bring your income down below the median income for a family of your size.  For instance, we can deduct the taxes you pay, your medical expenses, car payments, house payments, health insurance premiums, term life insurance premiums, child support, child care expenses, court ordered payments, education expenses for a physically or mentally challenged child, disability insurance premiums, charitable contributions (including tithing), and many more.

My point – even if you make more than the allowed amount, there is a good chance you may still qualify for a chapter 7 bankruptcy.

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