As you probably know, your eligibility for bankruptcy protection is determined in part by your household income. The Bankruptcy Code requires us to calculate your median income by looking at gross income earned by you, your spouse and any other working member of your household during the 6 months preceding the current month. We add up all the income and divide by 6 to arrive at a number. We then compare than number to a median income table provided to us by the Census Bureau and the United States Trustee's office. This calculation is called the "median income test."
If you are over median, then a presumption of abuse arises as to your eligibility for Chapter 7 and we must proceed to perform additional calculations (these additional calculations are called the "means test.").
The addition of the median income and the means test to the consumer bankruptcy process has made bankruptcy a lot more complicated both for lawyers and for individuals. I know several lawyers here in the Atlanta area who used to handle bankruptcy cases, but no longer do so because of the complexity of the median income/means test process. I personally think it is absurd that bankruptcy has become so complicated that a reasonably intelligent person would have almost no chance at figuring out the calculations. If there was ever a reason to avoid non-lawyer "petition perparers" this would be it.
Click on the link to see the current median income table for Georgia.
In any case, I did find an online tool that will allow you to calculate your median income. If you are so inclined, you can download this tool as an iPhone app! While obviously not a substitute for legal advice, this tool, created by a Massachusetts bankruptcy law firm, may help you get a sense of where you stand in terms of Chapter 7 eligibility.
