The median income for your household size is used in a bankruptcy case to determine which chapter of bankruptcy you qualify for, either a 7 or a 13 and whether you are a three or five year bankruptcy plan. Each state has set amounts for the median income, dependent on household size.
To determine your median income, your attorney will calculate your gross income from all sources (with a few exceptions) over the six month period prior to your case being filed. This includes gross wages, unemployment, contributions to household, child support, pension, etc. Exceptions are generally for veteran’s disability pay and social security income.
If you are over the median income amount in your state for your household size you would either look at doing a long form application to see if you may still qualify for a chapter 7 or look at a chapter 13 case. If you are over the median income in a chapter 13 case, you will be a five year plan instead of a three year. If you are under the median income in your state you can choose chapter 13 vs 7 and a three or five year plan.
In November 2024 the median income changed in Minnesota. For a household size of 1 it is $71,961, for a household size of 2 it is $92,245, for a household size of 3 it is $119,809 and for a household size of 4 it is $140,800. For individuals in your household above 4 you would add an additional $9,900 for each.
These amount are actually a little bit less than the previous median income in Minnesota that was in effect April 1, 2024.
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