Effective November 1, 2010: New Michigan Means Test Numbers

Anyone filing a bankruptcy after November 1, 2010 should be aware of the new means test numbers in effect.

The Means Test is what determines whether there is a so-called "presumption of abuse" in filing a chapter 7 bankruptcy under the BAPCPA amendment of 2005.  The test looks at your household's gross income from all sources (except income under the social security act) over the past six calendar months.  If your income is in excess of the median income for the same size household in the state of Michigan, you must calculate a hypothetical chapter 13 payment.  This calculation is fairly complicated, but if it results in a significant return to your creditors, the "presumption of abuse" arises.

The numbers for Michigan will be as follows:

1 person: $41,875 (was $43,611)

2 people: $49,919 (was $52,620)

3 people: $59,190 (was $61,737)

4 people: $70,600 (was $74,824)

4+ people: $70,600 + $7,500 per additional person (was $74,824 + $6,900/person)

It's important to stress that you can still qualify for a chapter 7, even if your gross income is over these numbers.  However, also note that these numbers are decreasing due to Michigan's economic crisis.  So if you wait too long to file, you could find yourself ineligible for a chapter 7.