Question of the Week: Will my new job affect my Bankruptcy filing?

I have been out of work for some time, my bills have gotten out of hand, and I need to file for Bankruptcy. I may be getting a new job soon. Will my new job affect my Bankruptcy filing?

If a would-be Chapter 7 debtor were to see a significant change in their income before filing a Chapter 7 bankruptcy, there is a risk that the debtor would no longer qualify under the Chapter 7 Means Test, and must file under Chapter 13. While Chapter 13 Bankruptcies are often effective in allowing a debtor to cure mortgage arrearages and keep their house, if the debtor’s intention is to pursue liquidation of all assets (including the house) or does not have real property to protect, your increased income would be required by the U.S. Trustee to fund the Chapter 13 plan, and not be used for other costs/expenses. In this case, a Chapter 7 Petition should be filed before any increase in income.

New State Median Family Income Figures Released

The United States Department of Justice has released the Census Bureau State Median Family Income By Family Size figures for means test calculations on Bankruptcy Cases filed on or after November 1, 2009. The new figures are available on the U.S. Trustee's website here.

These figures apply only to cases filed on or after November 1, 2009.

For Massachusetts, the new State Median Family Income figures are as follows:

Family of 1: $53,505
Family of 2: $69,451
Family of 3: $82,591
Family of 4*: $99,648

*Add $6,900 for each individual member in excess of 4.

Try our Chapter 7 Means Test Calculator by clicking here or on your mobile device by clicking here, now updated with a NEW feature that allows you to choose whether to use the old or new Median Family Income figures.

For additional questions regarding the new State Median Family Income figures, or any questions regarding Bankruptcy or the Chapter 7 Means Test, please contact Attorney Matthew Trask at (508) 655-5980.