The Median Income for Bankruptcy Debtors Rises on March 15, 2011

The Census Bureau median family incomes by family size shows that the median incomes for Florida residents will increase on March 15, 2011, which means more Florida debtors may be eligible to qualify for Chapter 7 bankruptcies. The median income is very important to the determination of whether a debtor in Florida is eligible to file a Chapter 7 bankruptcy. If a person makes less than the median income for his or her family size a presumption of abuse does not arise and the debtor may file without the necessity of qualifying under a more stringent means test. It is important to keep current on Florida median incomes when considering whether and when to file for bankruptcy. Proper planning and timing may be necessary if the median income is going to increase or decrease in the near future.

For example, if a debtor filed bankruptcy January 1, 2011 and made $39,800.00 gross income, he or she would have had to qualify under the means test in order to have filed a Chapter 7 bankruptcy because at that time the median income for 1 person was only $39,383. At that time, making $39,800 would have created a presumption of abuse. If that same debtor had waited to file until March 15, 2011 he or she would not have been subject to the means test because the debtor would have been under the new Florida median income of $40,029 and no presumption of abuse would arise.

The median income for Florida debtors based on family size starting March 15, 2011 is as follows:

1 earner is $40,029
2 persons is $50,130
3 persons is $54,594
4 persons is $65,135

For families larger than 4 add $7,500 for each additional person.

Prior to March 15, 2011, (11/1/2010 through 03/14/2011), the median income for Florida debtors based on family size was:

1 earner was $39,383
2 persons was $49,321
3 persons was $53,713
4 persons was $64,084