Passing The Means Test
When you prepare to file a Chapter 7 bankruptcy in Illinois, your “average household income” will be determined by averaging your monthly income over the last six calendar months. Once your average monthly income is determined, it’s multiplied by 12 to determine your annual income for the purpose of the Illinois means test. You must pass the means test before you can file a Chapter 7 bankruptcy in Illinois. The test only applies to higher-income bankruptcy filers; if your income is below the Illinois median income for your household size, you will be exempt from the test. If you’re considering a Chapter 7 bankruptcy in the Chicago area, it’s imperative to speak first with an experienced Chicago bankruptcy lawyer.
Several other exemptions from the means test are also available to certain Chapter 7 bankruptcy filers. If your debts are not primarily consumer debts, then you are exempt. If you are a disabled veteran and primarily incurred your debt during active duty or by performing a homeland defense activity, you are also exempt. If your income is higher than the Illinois median, instead of a Chapter 7 bankruptcy, consider a Chapter 13 bankruptcy that allows you to pay back a portion of your unsecured debts. As of 2014, these figures represent the median incomes for various-sized Illinois households:
- – For a 1-member household, $47,536.00
- – For a 2-member household, $61,253.00
- – For a 3-member household, $70,014.00
- – For a 4-member household, $81,680.00
- – For a 5-member household, $89,780.00
- – For a 6-member household, $97,880.00
- – For a 7-member household, $105,980.00
- – For a 8-member household, $114,080.00
- – For a 9-member household, $122,180.00
- – For a 10-member household, $130,280.00
Simply because you can file a Chapter 7 bankruptcy does not mean that you should. Bankruptcy is not for everyone; for many people, a number of better options are available. If you are considering bankruptcy and you’re in the greater Chicago area, speak first – and right away – with an experienced Chicago bankruptcy lawyer.
