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November 6, 2007

Median Income by Family Size by State

The U.S. Trustee's Office has posted the new median income figures for each state effective October 15, 2007.  New Jersey has the highest median income, $54,000 for a one person household, and Mississippi the lowest, $29,000. 

Now if they can figure out what is a household.

The relevance of the median income is, of course, that it determines who has to do the means test computations to see whether abuse is presumed or not.  Debtors whose income for the six months prior to filing is below the median do not have to do the means test headache.  In chapter 13 cases, above-median debtors compute the chapter 13 plan payments using the means testing formulas rather than looking to actual income and expenses.  At least that's what the code says.  Since the end result of the means test computations is often a completely artificial number, the chapter 13 plan payment computation is all over the board.   

The various IRS charts and a nifty program to calculate the hypothetical chapter 13 costs are also posted on the UST site.    

November 6, 2007 in Bankruptcy Statistics | Permalink

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