| The means test was implemented in the 2005 | | | | abuse of the bankruptcy code. Unfortunately, the |
| Bankruptcy Abuse Prevention and Consumer | | | | means test has done more to increase the cost of |
| Protection Act (BAPCPA). It looks at the gross | | | | bankruptcy and prevent honest people from |
| income from all sources that you've obtained over | | | | obtaining needed help than it has to stop abuse. While |
| the last six months. It then compares that figure to | | | | bankruptcy filings reach new highs, those who have |
| the median average income for a household of the | | | | received a large bonus in the last six months or have |
| same size in your state. Starting November 1, 2009, | | | | just lost their job suddenly "make too much" to file a |
| these numbers in Michigan are as follows: | | | | chapter 7 because the test unfairly looks backwards. |
| One earner - $43,611 | | | | Even so, most residents of Northern Michigan fall |
| Two people - $52,620 | | | | below the threshold because median incomes tend to |
| Three people - $61,737 | | | | be higher downstate, which throws off the average. |
| Four people - $74,824 | | | | Of the USDA's top ten median Michigan household |
| Four+ people - $74,824 + $6,900/person | | | | incomes by county for 2007, only Leelanau is in the |
| If your average gross income for the past six | | | | top ten. The only northern Michigan counties with |
| months is under this number, you can file a chapter 7 | | | | median household incomes (regardless of size) above |
| without a presumption of abuse, or file a chapter 13 | | | | the single filer level of $43,611.00 are Leelanau |
| with a 36 month repayment plan. | | | | ($55,292), Charlevoix ($48,829), Grand Traverse |
| If you are over this number, you must then subtract | | | | ($47,747), Emmet ($47,321), and Otsego ($44,591), |
| certain standardized IRS expenses from your income | | | | and those numbers aren't much higher than the |
| to determine whether you can file a chapter 7 | | | | individual filer threshold. |
| without a presumption of abuse. This is complicated, | | | | In other words, don't let the recent changes to the |
| but a competent bankruptcy attorney can often | | | | bankruptcy code deter you from exploring whether |
| assist you in arranging your finances to better your | | | | bankruptcy is an option for debt relief. Most Northern |
| chances. Otherwise, you must file a chapter 13 with a | | | | Michigan residents will qualify for a chapter 7 |
| 60 month repayment plan or rebut the presumption | | | | bankruptcy or a 36 month chapter 13 repayment |
| of abuse by showing special circumstances. | | | | plan. |
| The purpose of the means test was to prevent | | | | |