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Does It Make A Difference How Many People Live With Me When I File For Bankruptcy?

Yes, it can. And this is why it is so very important to make it clear to your bankruptcy attorney how many people live with you, whether those individuals include a spouse, children, parents, siblings, or other relatives. Because the number of people who live in your household can have a substantial impact on which chapter of bankruptcy you may end up filing.

When you file a Missouri or Illinois bankruptcy, there are many things that you will need to disclose to the Trustee and court. Among these things would include a list of all your personal property (furniture, appliances, bank accounts, pending contracts, etc.), a description of any real estate that you have an ownership in, a disclosure of all sources of income, and the number of people who reside with you. The court then requires that you complete what is called a Means Test. This ‘test’ is really a set of very complicated forms, with certain calculations, that must be accurately filled out and filed with the U.S. Trustee’s Office. After all pertinent deductions and exemptions are applied, it is then determined as to whether you are an above-median household or a below-median household.

Let me give you an example: according to the state of Missouri, the average (or median) income for a household of two is: $50,603 (as of January 10, 2012). If you are a household of two, and below this median income level, then you generally qualify for a St. Louis Chapter 7 bankruptcy (assuming you have not filed such a case in the last eight years). But if you are substantially above this level (say you have a household income of $70,000), then the court presumes that you make ‘too much’ money, and require that you do a St. Louis Chapter 13 bankruptcy.

Now let’s change the facts a little: now assume that you are a household of five (you, your spouse, two kids, and your elderly mother-in-law). According to the government, the average income for a household of five is: $74,155 (as of January 10, 2012). In this scenario, your total household income is $70,000, which means that as a household of five, you are below the median-income level. This would put you in a position now to file a Missouri or Illinois Chapter 7.

So as you can see, the number of people in your household can have a tremendous impact on what type of bankruptcy you file. The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been providing expert bankruptcy legal services for years. Our goal is get you the fresh start / clean slate that you deserve, and put you on the road towards financial freedom.