Income Guidelines for Filing for Bankruptcy in Maine
The Bankruptcy Abuse Prevention and Consumer Protection Act incorporated a means test into bankruptcy law. As a result, all debtors must take the means test prior to filing for bankruptcy. The means test takes your income into account and compares it to median incomes in Maine. Although you must take the means test to file for Chapter 7 and Chapter 13 bankruptcy, the test serves a different purpose for each chapter.
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Median Family Income
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Before you begin any bankruptcy case, you must take the means test to determine which chapter of bankruptcy you should file. Compare your family income to the median family income for a family of your family's size in Maine. The U.S. Trustee Program provides a list median incomes for your state. These figures change periodically, so check with the U.S. Trustee Program to make sure you have the most current figures. If you have a family of two, compare your family income to Maine's median family income of $51,600. If you have a family of four, compare your family income to Maine's median family income of $68,466. These figures are current as of 2011.
Calculating Family Income
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To calculate your family income, you first determine your current monthly income. Figure the average of your monthly income for the six months preceding the commencement of your bankruptcy case. That is your current monthly income. Multiply that number by 12 to come up with your family income. If you are married, follow the same steps with your spouse's income and add the results from both incomes. If your family income falls below Maine's median family income, you can file for Chapter 7 bankruptcy. If your family income hovers above Maine's median family income, you must calculate your monthly disposable income to determine whether you can file for Chapter 7 bankruptcy.
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Calculating Monthly Disposable Income
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Calculate your monthly disposable income by deducting your allowable expenses from your monthly income. If your monthly disposable income is less than $100, you can file for Chapter 7 bankruptcy. If your monthly disposable income is between $100 and $166.66, you may be able to file for Chapter 7 bankruptcy. If your monthly disposable income is more than $166.66, you cannot file for Chapter 7 bankruptcy.
Median Family Income & Chapter 13
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If you file for Chapter 13 bankruptcy, you must enter a debt repayment plan. Under the debt repayment plan, you spend the next three or five years repaying your debts. Your income determines the length of your plan. If your family income falls below Maine's median family income, you will spend the next three years repaying your debts under a Chapter 13 repayment plan. If your family income hovers above Maine's median family income, you will spend the next five years repaying your debts under a Chapter 13 repayment plan.
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