Does it Make a Difference if I File Bankruptcy Before the End of the Month?

If your income is above the median income for your household size, you must complete a “means test” when you file your bankruptcy petition. To determine whether you are above or below the median income, your gross income for the six month period prior to the month you file bankruptcy is considered. So if you file October 31, the six month period under examination is April through September. If you file, November 1, the six month period excludes April but adds October. If you get the exact same paycheck each payday, this won’t make a difference. But what if you got a lump sum bonus or a retroactive pay raise in one of your October paychecks? In that case, you could be under the median today, but well over it November 1.

Some income may not need to be included in determining median income. Social Security income, for example, is excluded. Just because you are over the median income and have to complete the means test, it doesn’t necessarily mean that you can’t file a Chapter 7. Be sure to work with an experienced bankruptcy lawyer to see what your best options are.