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The Means Test Gets Meaner on November 1, 2010; Bankruptcy Was A Lot Easier Before 2005!

By Joseph McDaniel, Esq.

The means test is a limbo bar that permits some people to file Chapter 7 Bankruptcy cases, and forces others to file Chapter 13 Bankruptcy cases (if you're filing a Chapter 13 Bankruptcy because you flunk the means test, plan on five years of bankruptcy purgatory), unless they qualify under the primarily business debt exception to the means test.

The means test is adjusted when the median income goes up (which is good, right? that permits more folks to file Chapter 7 "kinder and gentler" bankruptcy cases) and when the median goes down (which is bad, right? see "bankruptcy purgatory", above).

But right now, we have more people out of work, and more people are underemployed, as well. So the median income has gone down, right?

And since more people are more poor, we should make it more difficult for them to file a bankruptcy, right?

Makes perfect sense to me!

The new less kind and gentle numbers which will be applied to bankruptcy cases filed after November 1, 2010 can be found at the "Means Testing" page of the U.S. Trustee Program website.

I need to run a poll: should I have entitled this post, "Kicking the Poor While the Poor Are Already Down"?

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Full post as published by Arizona Bankruptcy Attorney Blog on October 31, 2010 (boomark / email).