One of the requirements when filing a bankruptcy is to complete a version of Bankruptcy Form 122 which is known as the “Chapter 7 Means Test Calculation” or the “Chapter 13 Calculation of Your Disposable Income.” Debtors enter their income and expense information on this form. The information is partially from the debtor’s records such as pay-stubs and some of the information used is from the Census Bureau and the Internal Revenue Service.
Family Median Income
State family Median Income figures come from the Census Bureau. The United States Census Bureau conducts surveys to determine a median income per household based on the household size. According to the United States Census Bureau website www.census.gov, “Census money income is defined as income received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc.” Please visit their website for a detailed look at how the numbers are derived. The Median Income figures are updated annually and also pursuant to 11 U.S.C. §101(39A)(B), the data is also adjusted early in the calendar year based upon the Consumer Price Index.
Median Income in Tennessee
The median income figures as of 11/1/2016 for TN are:
Household of 1: $42,731.00/yr.
Household of 2: $53,216.00/yr.
Household of 3: $59,294.00/yr.
Household of 4: $68,298.00/yr.
Median Income in Mississippi
The median income figures as of 11/1/2016 for MS are:
Household of 1: $36,589.00/yr.
Household of 2: $46,130.00/yr.
Household of 3: $49,983.00/yr.
Household of 4: $60,420.00/yr.
Median Income in Alabama
The median income figures as of 11/1/2016 for AL are:
Household of 1: $42,934.00/yr.
Household of 2: $52,310.00/yr.
Household of 3: $59,615.00/yr.
Household of 4: $70,056.00/yr.
*Add $8,400 for each individual in excess of 4
Why does this matter in my bankruptcy?
As a general rule, if your gross income received is higher than the median income, you may not qualify for a chapter 7 bankruptcy and you would need do a Chapter 13 Debt Consolidation bankruptcy. There are many other factors contributing to whether you would need to a Chapter 7 or Chapter 13 bankruptcy. If you are not sure which option is best for your or for which Chapter you qualify to file, contact one of our experienced attorneys for a free consultation.