Chapter 13 Bankruptcy and Chapter 7 Bankruptcy are both affected by the Median Household Income Increased. Call Sacramento Bankruptcy Attorney Muoi Chea for a more in-depth explanation.
Starting on November 1, 2019, the median household income figures used to determine Chapter 7 Bankruptcy eligibility has increased. Moreover, in Chapter 13 Bankruptcy, the median household income figures determine whether the commitment period is 3 or 5 years. That is whether the Debtor’s Chapter 13 Bankruptcy Payment Plan is a 3 year or 5 year term.
Chapter 7 Bankruptcy Means Test Eligibility
Starting on November 1, 2019, the median household income used to determine eligibility for Chapter 7 Bankruptcy has increased. This is great news for would be Chapter 7 Bankruptcy filers who worries that their household income may be too high. For example, if you live in Sacramento, California, the following median household income has increased: $59,286 for household of 1; $77,860 for household of 2; $86,665 for household of 3; $99,512 for household of 4. If you household is over 4, just add $9,000 for each additional individual over 4 to $99,512. These are the figures for California. If you live in other states, the median household income will be different.
Even if your income is below the median household income, does not mean you qualify for Chapter 7 Bankruptcy. There are other factors that determine qualification or whether filing Chapter 7 Bankruptcy is a good idea for your case. Likewise, even if your income is above the median household, you might qualify for Chapter 7 Bankruptcy by completing the entire form of the Means Test.
If your income is still too high, don’t worry there is another option. You should consider filing for Chapter 13 Bankruptcy. Chapter 13 Bankruptcy does not necessary mean paying all your debts back. If your income is too high where your plan payment would require you to repay all your debt back, you are doing so without the onerous interest rates your credit cards and personal loans are currently charge you. Your creditors will not be receiving their 30% or 100%-plus interest rates under the Chapter 13 Plan.
Chapter 13 Bankruptcy Commitment Period
The median household income determine the commitment period for Chapter 13 Bankruptcy payment plan. If your income is less than the median household income, you may choose to finish your plan payment in 3 years. If your income is more than the median household income, you have no choice but to complete your plan payment in 5 years. The only way an above-median income Debtor’s plan payment term can be less than 5 years is if Debtor pays all the debt back. The reasoning for the 5 year commitment period is to give the Sacramento Bankruptcy Court opportunity to collect more money from Debtor if her income increase or obtained more assets. The amount Debtor has to pay into the plan payment depends on Debtor’s disposable income, determined by a formula, and amount of unexempt assets.
For more information, schedule a consultation with Muoi Chea, experienced Sacramento Bankruptcy Attorney. She has offices in Stockton, Sacramento, Fairfield, California. Muoi Chea has help consumers and small businesses file for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy throughout Northern and Central, California. This includes Vacaville, Fairfield, Vallejo, Roseville, Rocklin, Woodland, Davis, Yuba, Tracy, Modesto, Folsom, Elk Grove, Lodi, Galt, CA and other nearby cities.
For Fairfield Bankruptcy Attorney Office, please call the main Sacramento Bankruptcy Attorney Office at 916-441-4205.
For Stockton Bankruptcy Attorney Office, please call the main Sacramento Bankruptcy Attorney Office at 916-441-4205