For individuals filing for bankruptcy, the news is good. For multiple member households, not so good. In order to file for a Chapter 7 bankruptcy, a debtor must have income over the past 6 months that is lower than the median family income for his state. If the debtor’s income is higher than that, the debtor will not be allowed to file under Chapter 7, and most debtors will then be required to file under Chapter 13. Chapter 13 requires that the debtor submit a plan to repay some or all of his debts over 3 to 5 years. For many debtors, Chapter 7 is preferable because it usually results in most or all of the debts being discharged in about 4 months.  The official Median Income levels are published by the U.S. Trustee’s Office of the Department of Justice. The most recent changes went into effect on Nov. 1, 2011, and the new numbers are higher for individuals and lower for multiple member households. This will make it easier for individuals to qualify for a Chapter 7 bankruptcy but more difficult for multiple member households. For an individual, the cutoff is $41,880 in annual income. For a family of 4, it is $76,117.  The irony is that the current economic slump results in a greater need for bankruptcy relief for families. But, that same economic slump lowered the median income, thereby making it harder to obtain relief. If you think that you do not qualify for a Chapter 7 under the Means Test, you should still consult a bankruptcy attorney. There are exceptions to the Means Test. For example, if most of your debt is related to a failed business venture, then the Means Test restrictions will not apply to you. For a full evaluation of your situation, call us, or fill out our online bankruptcy evaluation form.