The Means Test in a Michigan Bankruptcy Case

In 2005, in an effort to apply more stringent standards and prevent those with high income from applying, the bankruptcy laws in this country changed. Those who wish to file for a Chapter 7 bankruptcy, which basically wipes out unsecured debt, must pass what is now known as "the means test." Basically, if your household income exceeds the median income in Michigan for your household size, you will not be eligible for a Chapter 7 bankruptcy petition; you can, however, file for a Chapter 13 bankruptcy in which a repayment plan is created. Through the repayment plan, your creditors will be paid by the bankruptcy court.

In Michigan as of November 12, 2012 the median income for a 2-member household was listed at $51,544. A 3-member household median income was listed as $60,464. If your household earns more than the median amount, then you would not be eligible to file a Chapter 7 petition unless there are further deductions that would lower your income to an amount that would qualify you. Deductions that may apply can include such things as payroll taxes, government-permitted budget credits, secured debt on your home, a car, or certain other required expenses that can lower your gross income. Because this aspect of the means test can be complicated, it is best to consult with a bankruptcy attorney who can analyze your individual case to fully ascertain your eligibility for a Chapter 7 filing.

Michigan Bankruptcy Attorney

In the recent years since the recession hit, many individuals and families throughout the state and the nation have found themselves in severe financial debt. A vast majority of these cases have stemmed from such adverse events as job loss or reduction in hours, a costly medical emergency such as an illness or injury, a costly divorce, or an investment or business failure. In many of these cases, the only option available to these people has been a Chapter 7 or Chapter 13 bankruptcy.

If you have found yourself in this position, getting debt relief information is vital. The Hensel Law Office, located in Sterling Heights, provides competent and caring legal assistance. Attorney Thomas Hensel is a sole practitioner who will handle your bankruptcy case from start to finish. You will never be passed from one attorney or paralegal to another as you progress through your case. You will never have to retell your story over and over to various legal professionals. Mr. Hensel provides personalized service that is dedicated to ensuring that your bankruptcy case is handled professionally, thoroughly, and with the greatest attention to detail throughout the entire process. Contact his firm to schedule a free, initial consultation to find out what your legal options are in the matter of debt relief.