Median Income Levels Changing

The median income levels are due up for a change something in the next month or two (usually mid-October or November 1). Median income levels change twice each year. Being below median means you are presumed to qualify for a Chapter 7 Bankruptcy. Being above median means you are presumed to have to file Chapter 13 Bankruptcy (although there are exceptions to both of these presumptions). While I don't yet know what the new median income levels will be, it has been reported that the income levels are dropping. That means that your income could be below median now, but by the end of the year, you will instead be above median. The median income levels are a reflection of the average household income in each state for any given household size. So if median income levels drop next month, that generally means that Americans are earning less money than they were 6 months ago. That probably doesn't come as much of a surprise to anyone, but here's what might… When the median income level drops, more Americans are presumed to have to file Chapter 13 (debt repayment) even though Americans are, as a whole, making less money. When the median income level increases, more Americans qualify for Chapter 7 (simple discharge), even though we're making more money as a nation. Regarding the bankruptcy laws passed in 2005, one of my colleagues is fond of saying, "Morons wrote this law. It doesn't make sense, but it is what it is." And when you think about this correlation between median income levels and what it means for bankruptcy filings, you have to agree with the sentiment.

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