Important BK changes effective 11/1/11 for chapter 7 & 13 filers.

[sheilaE]

Our atty sent us the email below. I haven't seen any postings regarding this very important change. Could it be it's just for our district?

Hello all,

I'm writing to let you know about an important bankruptcy change that will make it more likely you cannot file Chapter 7 bankruptcy after November 1, 2011.

In order to qualify to file a chapter 7 bankruptcy, your family cannot make more than a certain prescribed amount set by the US trustee's office. Presently, a single person cannot make more than $48,009 after certain prescribed deductions. A family of 2 is allowed to make no more than $62,970. A family of 3 is not allowed to make more than $68,670. A family of 4 is not allowed to make more than $78,869.

Beginning November 1, 2011, these numbers will be drastically reduced. It is going to make it less likely that you qualify for chapter 7. A family of one will not be allowed to make more than $47,683. A family of 2 cannot make more than $61,539. A family of 3 cannot make more than $66,050. In a family of 4 will not be allowed to make more than $74,806. I have never seen such a large reduction in the amount a family can make to qualify for bankruptcy. This is not good news.

As you may recall, in a chapter 7 bankruptcy, you are not required to pay back your creditors any money. If you make more than the prescribed amount listed above, you'll have to file a chapter 13 bankruptcy and pay a portion of your debt back to the creditors over a three-year or a five-year timeframe. If you're already considering filing a chapter 13, the change will mean that you will have to pay more money into your plan.

Because of this change, I want to encourage you to file your bankruptcy before the change takes effect. Remember, you have to take a class before filing bankruptcy.

[tobee43]

Our atty sent us the email below. I haven't seen any postings regarding this very important change.

Hello all,

I'm writing to let you know about an important bankruptcy change that will make it more likely you cannot file Chapter 7 bankruptcy after November 1, 2011.

In order to qualify to file a chapter 7 bankruptcy, your family cannot make more than a certain prescribed amount set by the US trustee's office. Presently, a single person cannot make more than $48,009 after certain prescribed deductions. A family of 2 is allowed to make no more than $62,970. A family of 3 is not allowed to make more than $68,670. A family of 4 is not allowed to make more than $78,869.

Beginning November 1, 2011, these numbers will be drastically reduced. It is going to make it less likely that you qualify for chapter 7. A family of one will not be allowed to make more than $47,683. A family of 2 cannot make more than $61,539. A family of 3 cannot make more than $66,050. In a family of 4 will not be allowed to make more than $74,806. I have never seen such a large reduction in the amount a family can make to qualify for bankruptcy. This is not good news.

As you may recall, in a chapter 7 bankruptcy, you are not required to pay back your creditors any money. If you make more than the prescribed amount listed above, you'll have to file a chapter 13 bankruptcy and pay a portion of your debt back to the creditors over a three-year or a five-year timeframe. If you're already considering filing a chapter 13, the change will mean that you will have to pay more money into your plan.

Because of this change, I want to encourage you to file your bankruptcy before the change takes effect. Remember, you have to take a class before filing bankruptcy.

i know florida changed their median income last janurary, so it may vary state by state. just to make life for us more joyful

and don't forget the Mortgage Forgiveness Debt Relief Act of 2007 which expires in 2012.

[ValleYum]

It is for everyone, everywhere. They usually make these adjustments twice per year to the Means Testing data.

The UST website allows you to choose data for your Means Testing using either filing now or after 11/01/2011.

Looking quickly through the state info, it appears almost every state is lowering the Median Income.

As Shark66 says, "Good luck to us all".

[tobee43]

It is for everyone, everywhere. They usually make these adjustments twice per year to the Means Testing data.

The UST website allows you to choose data for your Means Testing using either filing now or after 11/01/2011.

Looking quickly through the state info, it appears almost every state is lowering the Median Income by about 2.5%.

As Shark66 says, "Good luck to us all".

well, here in florida is CRAZY...it varies from county to county as far as the median income. it's nuts...also in some counties here the unemployment payments are covered under the ss act while the next county over it's not. go figure...

i'm with shark!!! and where is HE??? by the way

[ValleYum]

Our atty sent us the email below. I haven't seen any postings regarding this very important change. Could it be it's just for our district?

Hello all,

I'm writing to let you know about an important bankruptcy change that will make it more likely you cannot file Chapter 7 bankruptcy after November 1, 2011.

In order to qualify to file a chapter 7 bankruptcy, your family cannot make more than a certain prescribed amount set by the US trustee's office. Presently, a single person cannot make more than $48,009 after certain prescribed deductions. A family of 2 is allowed to make no more than $62,970. A family of 3 is not allowed to make more than $68,670. A family of 4 is not allowed to make more than $78,869.

Beginning November 1, 2011, these numbers will be drastically reduced. It is going to make it less likely that you qualify for chapter 7. A family of one will not be allowed to make more than $47,683. A family of 2 cannot make more than $61,539. A family of 3 cannot make more than $66,050. In a family of 4 will not be allowed to make more than $74,806. I have never seen such a large reduction in the amount a family can make to qualify for bankruptcy. This is not good news.

As you may recall, in a chapter 7 bankruptcy, you are not required to pay back your creditors any money. If you make more than the prescribed amount listed above, you'll have to file a chapter 13 bankruptcy and pay a portion of your debt back to the creditors over a three-year or a five-year timeframe. If you're already considering filing a chapter 13, the change will mean that you will have to pay more money into your plan.

Because of this change, I want to encourage you to file your bankruptcy before the change takes effect. Remember, you have to take a class before filing bankruptcy.

Thanks for sharing sheila!!

I do take issue to what the attorney says where I highlighted in red text. It is wrong.

If you make more money than the prescribed amount listed above it means that you will have to take the Means Test in order to qualify for a Chapter 7 bankruptcy. You are not automatically excluded from filing a Chapter 7 by virtue of your income alone.

[mountanddo]

Beginning November 1, 2011, these numbers will be drastically reduced. It is going to make it less likely that you qualify for chapter 7. A family of one will not be allowed to make more than $47,683. A family of 2 cannot make more than $61,539. A family of 3 cannot make more than $66,050. In a family of 4 will not be allowed to make more than $74,806. I have never seen such a large reduction in the amount a family can make to qualify for bankruptcy. This is not good news.

To me the difference is not that drastic. For a family of one it is less than $1,000 and a family of four about $3,000. Sounds like he is trying to scare people to drum up some business. Have you filed yet or did he send this to all his clients?

Remember, you have to take a class before filing bankruptcy.

This doesn't sound professional to me.

Maybe I'm just a suspicious person but this attorney needs to have someone read his email communication before he sends it out because it is poorly written.

[ValleYum]

well, here in florida is CRAZY...it varies from country to country as far as the median income. it's nuts...also in some counties here the unemployment payments are covered under the ss act while the next county over it's not. go figure...

Median income is by state. It is determined by the Census Bureau.

It may have been from county to county in Florida when you filed but it is a statewide number now.

[ValleYum]

To me the difference is not that drastic. For a family of one it is less than $1,000 and a family of four about $3,000. Sounds like he is trying to scare people to drum up some business. Have you filed yet or did he send this to all his clients?



This doesn't sound professional to me.

Maybe I'm just a suspicious person but this attorney needs to have someone read his email communication before he sends it out because it is poorly written.

I agree with you that the attorney is likely trying to stir up business with his e-mail. At the very least, he is trying to get those who are dipping a toe into the pool to jump on in. I do applaud him for letting people know and giving them the option to try to file by 10/31.

But in my opinion $3,000 is a lot of money when you are trying to make sure you do not have enough DMI to fund a Chapter 13. That computes to $250 per month that you have to find legitimate expenses to cover.

[mountanddo]

I agree with you that the attorney is likely trying to stir up business with his e-mail. At the very least, he is trying to get those who are dipping a toe into the pool to jump on in. I do applaud him for letting people know and giving them the option to try to file by 10/31.

But in my opinion $3,000 is a lot of money when you are trying to make sure you do not have enough DMI to fund a Chapter 13. That computes to $250 per month that you have to find legitimate expenses to cover.

True, I didn't look at it that way as I'm not going to be in a Chapter 7.

[tobee43]

Median income is by state. It is determined by the Census Bureau.

It may have been from county to county in Florida when you filed but it is a statewide number now.

i hear you!!! actually i think the changes are so different, i'm hard pressed to think we would have been about to file a chaper 7!!! how scary is that.

you know, they are keeping these changes quiet. i know the bottom line is that too many Americans are filing, so they are changing the rules and making it more difficult for those to try to file

[ValleYum]

i hear you!!! actually i think the changes are so different, i'm hard pressed to think we would have been about to file a chaper 7!!! how scary is that.

you know, they are keeping these changes quiet. i know the bottom line is that too many Americans are filing, so they are changing the rules and making it more difficult for those to try to file

Sadly, tobee, you are right about it getting more difficult to file a consumer Chapter 7. I am so glad we did when we did.

[ValleYum]

True, I didn't look at it that way as I'm not going to be in a Chapter 7.

No worries! I find some of the Chapter 13 stuff hard to comprehend because I wasn't in one. I think it is good to get viewpoints from both the Chapter 7 and the Chapter 13 angle, though.

[sheilaE]

He sent the email to all his pending clients. I wasn't sure if he was trying to scare everyone into filing or not. Probably not-I've been very paranoid while we get this all planned out. I posted the thread here, but we are going to be filing 13. We were hoping to wait until after the 1st of the year to file. Once we file, a plan will be drawn up and we will be handing over $$$ immediately to go into our payment plan. This may sound silly, but we'd at least have a small Christmas for the kids ...we have 3 children.

[HHM]

This is a routine change, median income numbers are adjusted every 6 months.

The OTHER change happening Nov 1. is that filing fees are changing (which is nationwide)
Chapter 7 will go from $299 to $306
Chapter 13 will go from $274 to $281.

The only number that is county by county is the Allowed Housing Expense. Median income figures have ALWAYS been statewide numbers. Where you can get some regional variation is in the allowed expenses, housing is county by county, vehicle is region by region, etc.

[LadyInTheRed]

But in my opinion $3,000 is a lot of money when you are trying to make sure you do not have enough DMI to fund a Chapter 13. That computes to $250 per month that you have to find legitimate expenses to cover.

There is no change in how DMI is calculated on the means test. If you can pass the means test before November 1, you can pass the means test after November 1. The decrease in median income will only force more people to complete the means test, not change whether they can pass it. If allowed expenses also decreased, then it would become more difficult to pass the means test.

you know, they are keeping these changes quiet. i know the bottom line is that too many Americans are filing, so they are changing the rules and making it more difficult for those to try to file

There is nothing to keep quite. Nobody has changed any rules. What has changed is how much money people make. No surprise there given the state of our economy.