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CH 13 Bankruptcy.If I marry how will new spouses income affect my Bankruptcy filing??

York, PA |

In Pennsylvania, what is the median low and high income to file for Chapter 13 Bankruptcy for a family of 6?

I am wanting to get married possibly before my 3 year plan is up, how will my fiances' income and expenses effect my plan? How is it calculated when adding his income, debt and expenses? He makes around 80,000 a year and owns his own business, has 3 properties, but a lot of debt.

Thank you in advance for all your help answering my questions.

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Attorney answers 1


The answer is somewhat complex, but here is an overview:

Three snapshots of income are taken in a Chapter 13 bankruptcy case: (1) the average monthly gross income of the debtor's household for the 6-month period immediately preceding the month of the debtor's bankruptcy filing; (2) the debtor and the debtor's spouse's current net income; and (3) the annual increase of income recognized by the debtor and his or her spouse during the course of the chapter 13 plan term.

The first snapshot allows for the determination of whether the debtor is a below-median income debtor or an above-median income debtor, compelling a 5-year chapter 13 filing over a 3-year chapter 13 plan or a simpler chapter 7 filing.

The second applies when a debtor is a below-median debtor and is used to determine the amount that the debtor would commit in a non-mandatory 3-year chapter 13 plan. This may arise where the debtor elects to be in a chapter 13 case to cure a mortgage arrearage or because the debtor has non-exempt equity in assets that he or she does not wish to have liquidated by a chapter 7 trustee. It is also used to gauge whether the debtor has the ability to perform a proposed plan (i.e, whether the debtor's plan is feasible).

The third is used in chapter 13 cases in my district (the Middle District of Pennsylvania) by the chapter 13 trustee once each year during the plan term to determine whether a debtor must increase his or her monthly plan payment (where income has increase by 10% from the base year).

The median income for a family of 6 exceeds $78,000.00. However, I am currently away from my office where I can calculate the exact figure.