New Colorado state median income numbers go into effect on November 1, 2011. The numbers come from the U.S. Census Bureau.
These numbers are especially important for people considering Chapter 7 bankruptcy. Individuals who want to file Chapter 7 bankruptcy must first pass a “means test” which requires their annual income to fit within the state’s median income levels. The median income takes into account the person household size and is based on the person’s income for the six months prior to the month the bankruptcy petition is filed.
For Colorado, the median income numbers are:
Household size 1: $47,361
Household size 2: $62,431
Household size 3: $69,252
Household size 4: $79,905
For a household size of more than 4, $7,500 per additional person is added to $79,905.
If the household income is above the median income, the individual will have to do further calculations under the means test, taking into account certain expenses to see if her income can be adjusted to below median income levels.
Of course, income is only one factor in deciding whether or not an individual should file Chapter 7. Other factors might include whether or not the debtor has property that he or she wants to keep after the bankruptcy. Such debtors may want to consider filing a Chapter 13 bankruptcy case.