The first hurdle in the newly enacted means test for Chapter 7 eligibility is the median income for a household of comparable size in that state. Those under the median pass the means test at the first hurdle; those above the median go on to calculate if their allowed expenses yield “disposable income” sufficient to repay creditors a portion of their claims.

The Census Bureau has just released new figures that are used in bankruptcy cases filed after February 1. For California, those figures are

• 1 person household $44,499
• 2 person household 59,086
• 3 person household 64,118
• 4 person household 72,996

One of the glitches in the drafting of the 05 amendments is that the language of the statute talks about comparing the size of the “household” to the census figures for “families”. Thus the household may be measured by the Census Bureau’s “heads on beds” standard, irrespective of the degree of economic interdependence of those sleeping in those beds. Yet we indulge in the fiction that Congress knew what is was thinking when it passed this act. The more we work with the “new law”, the more fictional it becomes.