The bankruptcy means test income thresholds have changed as of April 1, 2022. I discussed this change in my last blog post. Now is a good time to post a few things to remember while dealing with the bankruptcy means test. Just some random thoughts and information…
-Household size is generally determined by your federal income tax dependent claims and your marriage status. If you claim a kid on your taxes, you can likely claim them as a dependent in bankruptcy.
-The means test has a very broad definition of income. It includes things such as bonuses, commissions, gambling winnings, unemployment, second jobs, and the even one time windfalls such as lottery winnings. It does not include Social Security and VA benefits.
-While the means test thresholds are expressed in yearly amounts, it is actually only the six months previous to the month of filing that are considered.
-You may be exempt from the means test if either your debts were accrued while you were on active duty in the military, or your debts are primarily business in nature.
-The means test includes the income of both spouses, even if only one spouse is intending to file. This can be a little confusing for bankruptcy filers, but the fact you must disclose your non-filing spouse’s income will have no impact on them. They are not a part of the bankruptcy filing.
-The means test income threshold‘s are updated every year on April 1st.
-Means test deductions are generally based off of IRS standards, but actual taxes paid and insurance costs can be used.
These are just a few things to keep in mind if you are considering filing bankruptcy and you don’t know whether or not you will pass the means test. If you have any questions about Bankruptcy or the means test, please reach out to us at 412-414-9366. I would be happy to set up a free consultation and discuss your situation!