Chermack Law

  • Practice Areas
    • Family Law
    • Bankruptcy
    • Adoption
    • Housing Law
  • About Liz
  • Contact
  • Blog
  • Se Habla Español

Tag Archives: median income

Median Income and the Means Test: Gross Income vs. Net Income

Posted on April 19, 2011 by Elizabeth Rosar Chermack

In a consumer bankruptcy case,  a person’s gross income is used to calculate whether the debtor is above or below the median income for means test purposes.

People often confuse gross and net (or “take-home”) income, and that is understandable, because most people’s household budgets operate according to their take-home pay. However, when you are trying to determine whether your household income is above or below median income, it is determined according to your gross income – not your take-home pay.

If you have self-employment income, in order to determine your income for means test purposes, you will need to have an up-to-date profit and loss statement. It is also very important for self-employed people to keep good records and documentation (think: bank statements, receipts, etc.).

Posted in Bankruptcy Law | Tags: gross income, means test, median income, net income, profit and loss statement, self-employment, take-home pay | Leave a comment |

Median Income and the Means Test

Posted on February 22, 2011 by Elizabeth Rosar Chermack

In 2005, BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act) was passed. For more information about BAPCPA, through the lens of the U.S. Trustee Program, see this website.

One of the most “fun” parts of BAPCPA is the application of the means test in a consumer case (Form B22 in a bankruptcy petition).  Here is an example of Form B22A. If your household income (for the last 6 months before you file your bankruptcy petition) is below the median income for your household size in your state, then the means test is pretty easy. If your household income is above the median income, then the means test becomes more complicated.

How do you know if your household income is above the median income for your state? Here is a link to the numbers as of November 1, 2010. The numbers change pretty regularly, so it’s also a good idea to check here and make sure that the numbers you are accessing are the most recent numbers. If you are filing a consumer Chapter 7 Bankruptcy and your income is over the median income, Form B22 becomes a bit more complicated for you. Depending on the results of your Form B22, you may not qualify for a Chapter 7 Bankruptcy, and may be required to file a Chapter 13 bankruptcy instead.

Posted in Bankruptcy Law | Tags: BAPCPA, Chapter 7, Form B22, means test, median income | 4 Comments |

Recent Posts

  • Updated means test numbers – effective November 1, 2020
  • Uncontested Flat Fee Divorce and Custody Cases
  • Family Law Intake Forms
  • Balancing Act: Episodes 31 thru 35
  • Balancing Act: Episodes 28 thru 30

CyberChimps WordPress Themes

© Elizabeth Rosar Chermack, Attorney at Law. Disclaimer: The content of this website is provided for informational purposes only. Information you obtain from this website is not, nor is it intended to be, legal advice. You should consult an attorney for individualized advice. Use of this website does not create an attorney-client relationship. Elizabeth Rosar Chermack, Attorney at Law, is a designated debt relief agency by an Act of Congress and the President of the United States. She assists consumers seeking relief under the U.S. Bankruptcy Code.