Median Income and Bankruptcy

Whether you qualify for a Chapter 7 bankruptcy is a function of median income as well as the Means Test.

Let’s start by looking at median income. This is a standard used to determine if you automatically qualify for Chapter 7 bankruptcy. If your median income for your household size is less than the median income, you qualify.

As of November 26th, 2013, below you’ll find the median income for the past six months, based on household size, for Mecklenburg County zip codes:

Household Size                 Median Monthly Income              Median Annualized Income

1                                              $3,395                                                   $40,736

2                                              $4,305                                                   $51,662

3                                              $4,587                                                   $55,049

4                                              $5,512                                                   $66,147

5                                              $6,187                                                   $74,247

6                                              $6,862                                                   $82,347


What If My Income Is More Than The Median Income?

If you make less than the median income above, based on your household size, you automatically qualify for a Chapter 7 bankruptcy from an income perspective. If your income is more than the totals above, you probably still qualify for Chapter 7 if you’re having difficulty paying your monthly expenses.

The Means Test is the method you would employ to establish your ability to file. It is a function of your income and expenses and your Charlotte Bankruptcy Lawyer can help you provide the information necessary to determine whether you’ll pass the Means Test.

What Other Options Are There?

If you make more than the median income, and you don’t pass the Means Test, you can consider filing a Chapter 13 bankruptcy. While a Chapter 7 filing is a liquidation of debt, a Chapter 13 results in a monthly payment in bankruptcy. Typically, a Chapter 13 payment will be based on a percentage of your unsecured debt—credit cards, medical bills, etc—and after the plan is completed, you will be discharged of the remaining debt.

What Should I Do Next?

The next thing you should do is CALL AN ATTORNEY. Whether it’s this law firm or another Charlotte Bankruptcy Lawyer, you can prevent the loss of your property to creditors and the effect of judgments by speaking to an attorney and finding out your options. The call is free—704.749.7747.