What Is the Ohio Bankruptcy Means Test?
The means test in Ohio is how the bankruptcy court determines if you are eligible to file Chapter 7 bankruptcy or if you must file Chapter 13. Those filing for bankruptcy protection must be below certain income levels in order to have the option of total discharge of debt that Chapter 7 provides. You can still file for bankruptcy if your income level fails the test, but you will have to file Chapter 13, where the court trustee devises a three- to five-year repayment plan based on your disposable income. Means testing measures your income and expenses against the average income in Ohio and the IRS expense allowance.
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Income Limits
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For those seeking Chapter 7 bankruptcy relief, the U.S. Trustee Program determines the median income levels from information that the U.S. Census Bureau gathers. According to the Trustee Program, in 2009 the median income limits in Ohio were $42,458 for an individual, $53,922 for a married couple, $62,251 for a family of three and $74,234 for a family of four. Families larger than four add $6,900 for each member beyond four. If your income is less than the limit, you are eligible to file Chapter 7. The court counts your spouse's income when applying the means test, even if you do not declare bankruptcy as a married couple.
Allowances
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If your gross income is over the limits for your family size, you must continue the means test to determine if subtracting your allowances will bring you under the limit. The trustee will use tables developed by the IRS known as the Collection Financial Standards that specify the subtraction amounts for household expenses, food, clothing and transportation. While the allowances for food and clothing are the same across the continental United States, the amounts for transportation vary depending on location.
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Food, Clothing and Other Item Allowances
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The Collection Financial Standard for food, clothing and other items sets the allowances for household necessities. According to the U.S. Trustee Program, in 2009 the monthly allowances are $517 for an individual, $985 for a couple, $1,152 for a family of three and $1,370 for a family of four. Families larger than four can add $262 per person beyond four to arrive at their allowances. In certain circumstances, the trustee can increase your food and clothing allowances by 5 percent.
Housing
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The Ohio county in which you live and your family size determine your housing allowance. The standards determine the amount you can subtract for utility expenses and housing costs. For example, according to the U.S. Trustee Program, in 2009 the allowance for a one-person household in Hamilton County -- Cincinnati, Ohio, area -- for non-mortgage expenses was $419, and the mortgage or rent allowance was $784 monthly. The allowances in Meigs County -- a rural part of the state -- for an individual was $361 for non-mortgage expenses and $415 for mortgage or rent per month.
Transportation
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Your transportation cost allowance depends on where in Ohio you live and whether you take public transportation or have your own vehicle(s). According to the U.S. Trustee Program, in 2009 the monthly operating cost allowance was $183 for households with one vehicle and $366 for households with two vehicles in all parts of Ohio except Cleveland. In Cleveland, the amounts were $186 and $272 per month, respectively, due to Cleveland being a Metropolitan Statistical Area (MSA) with higher allowances. The trustee also allows $173 per month for public transportation if you do not own a vehicle and $489 monthly for vehicle ownership costs for each car -- up to two -- that you own.
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