“Am I eligible for bankruptcy?” — means test information for Massachusetts residents

Since 2005, debtors considering Chapter 7 bankruptcy are required to qualify, or pass a “means test” in order to have their debts discharged under the favorable laws found in this section of the Bankruptcy Code.

Although debtors throughout the United States are required to submit the means test forms, the results may differ based on where a debtor lives, because the test looks at the median income for the particular state where they live, as well as the size of the debtor’s family.

To get a rough idea on whether you can pass the test, first figure out your family income for the past six months, then multiply it by two to get an annualized figure. Married debtors should count both the husband and wife’s, even if only one person is going to file for bankruptcy.

If you live in Massachusetts and are thinking about a chapter 7 bankruptcy, compare your income figure to these median income statistics:

One person family: $53,315
Two person family: $69,204
Three person family: $82,297
Four person family: $99,293
Five person family: $106, 793
Six person family: $114, 293

If your income is below the appropriate median income shown above, you can assume you pass the test, and will be cleared to file under Chapter 7. But if your income is slightly above the median, don’t despair, because you are still allowed to take various deductions against that income, so you still may qualify. However, consultation with a bankruptcy attorney is suggested at that point, because the rules concerning the deductions can get complicated fast!


By Doug Beaton

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