Effective April 1, 2020, the table used to determine the “means test” in Chapter 7 and Chapter 13 bankruptcy has been updated for the Western District of Pennsylvania.
The amount you can earn without repaying unsecured creditors is determined by 1) your household size, and 2) your household income. This information is used to calculate the “means test”, which is an objective standard of whether you are required to repay.
Your household size will, with only a few exceptions, include you, your spouse, and any children you claim on your taxes. Your spouse will be included for calculation purposes even if they have no intention of filing bankruptcy. They will not be included if you are legally separated and living in separate households. Children will be included as long as they are still claimed on your federal income taxes. Non-claimed children will not be included for purposed of household size.
Household income is broadly calculated to include almost anything besides benefits derived from the Social Security Act. This includes unemployment, bonuses, self-employment, or even alimony and child support. The look-back period is the six months before filing bankruptcy.
It is important to point out that it will NOT include income received as part of the CARES stimulus act.
One last important thing to remember is that income is determined by GROSS, before tax, income. Here is the updated chart for gross income in the six months before filing, as of April 1, 2020 (amount listed below is combined income for all household members, averaged per month):
Household of one: $4,550.00 per month
Household of two: $5,628.00 per month (including all earners)
Household of three: $6,989.00 per month (including all earners)
Household of four: $8,610.00 per month (including all earners)
Household of five: $9,360.00 per month (including all earners)
Household of six: $10,110.00 per month (including all earners)
Household of seven: $10,860.00 per month (including all earners)
Contact us for a more detailed analysis of your income. If you are able to forward me proof of income, I can determined whether or not you will be required to pay unsecured creditors in bankruptcy.
If your income is disrupted by the COVID-19 epidemic, now may be the best time to file.