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


By:Michael A. Cibik

If your income is above the median income for your household size in your state, 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 would file, October 31, the six-month period under examination is April through September. If you file the next day, 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 tomorrow.


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, it doesn’t necessarily mean that you can’t file a Chapter 7. For example, if more than 50% of your debt is business related and not consumer debt, you may be able to avoid the “means test” and qualify for Chapter 7 Bankruptcy. Therefore, be sure to work with an experienced bankruptcy lawyer to see what your best options are.

Michael A. Cibik, Esquire

Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few bankruptcy attorneys in the Philadelphia area certified by the American Bankruptcy Board.

If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.


Bankruptcy Law Awards/Associations

We are a debt relief agency that helps people
seek bankruptcy protection under federal law