Bankruptcy law was passed in 2005 which made it more difficult to file Chapter 7 Bankruptcy. Under the Bankruptcy Abuse Prevention and Consumer Act (BAPCPA) individuals must now take a credit counseling course prior to the filing bankruptcy, pass a financial management course prior to the discharge of their debt and pass an income test to file Chapter 7 Bankruptcy. The goal of the BAPCPA is to encourage more individuals to repay all or a portion of their debts by filing Chapter 13 Bankruptcy.
If you wish to file Chapter 7 Bankruptcy, you must pass an income test. The income test will compare your median income to other Montana families of similar size. If your median income is less, you may be able to file Chapter 7 Bankruptcy. If your income is higher, you will need to complete more means testing.
Means testing is used to determine how much disposable income you have after your expenses are paid. Means testing will take your gross income and subtract certain expenses such as your house payment, car payment, school tuition (limit $1650), child support, and taxes owed. If the amount left allows you to pay $6,000 or $100 per month toward debt repayment over the next sixty days, you may have to file Chapter 13 Bankruptcy. If you can not do this but you could pay up to 25% toward your debt in the next sixty months, you may have to file Chapter 13 Bankruptcy.
The United States Trustee Program publishes all the median incomes for each state in the State of Median Income Chart. They update the chart periodically. As of March 15, 2009, the median income for the state of Montana is $39,484 for a single wage earner. For a family of two it is $52,796 and for a family of three it is $52,796. For a family of four it is $65,175. - See more at: http://www.bankruptcyhome.com/bankruptcyblog/2010/05/19/chapter-7-means-testing-in-montana/#sthash.SyQKNaUZ.dpuf