The median income guidelines for those needing to file bankruptcy are changing again – this time for the better.

Typically when you declare bankruptcy, you have to fill out what is known as a “means test” form. This form is used to determine whether or not the government believes you should be able to pay your debts back, or not. When you fill out this form, you must fall within an acceptable income range. If you go over that range your options are limited or you can’t declare bankruptcy.

On October 1, 2008 the maximum income levels that cap bankruptcy filings are being slightly raised – good news for anyone who earns an income that approaches the means test cutoff figures.

Here are some links to reference materials that will let you look up your state’s bankruptcy and income guidelines, both in the past, and with the new changes:

• The updated rules: New median income figures for filing bankruptcy (by state).
• The old rules: Past median income figures for filing bankruptcy. (Valid until October 1, 2008)

In other bankruptcy news:

More senior citizens are declaring bankruptcy than ever before. It’s a sad day when our elderly are going broke and are unable to keep the assets they worked a lifetime to acquire.

Gone are the days of a secure pension, or job security of any sort. Most likely, Social Security and Medicare will also soon be gone, or have greatly diminished benefits.

Between the years of 1991 and 2007 bankruptcy filings among older Americans more than quadrupled.

Last year alone people over 55 accounted for 22% of all the bankruptcies that were filed.

It is my belief that unfortunately, this trend has only just begun. As more and more baby boomers move into retirement with large amounts of credit card debt, multiple mortgages and HELOCS, I think it is a very telling sign of the times. It’s going to put a strain on the rest of us too, as we get to look forward to increased Social Security taxes in addition to the rising costs of food and gas.

Despite our government’s halfhearted efforts to reform them, Social Security and Medicare very much remain the “elephant in the room” that everyone sees, but wants to pretend it doesn’t exist. It is my hope that something will be done to help our seniors soon, before these programs reach critical mass and explode. It may not be “right” that so many seniors are depending on the government for their survival, but it is still the truth.

What is your take on the problems facing Social Security and Medicare? How would you reform them if you could? Leave us a comment below!

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Photo Credits: mental-emotionalhealth.com,bankruptcybenefit.com

This entry was posted on Monday, September 1st, 2008 at 09:45 and is filed under Bankruptcy FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.