The Bankruptcy Code amendments which took effect October 17, 2005 require “means testing” to determine if debtors have significant income to allow them to repay a portion of their debts.  Part of a Chapter 7 filing is an analysis of your average income over the prior six months to see if your income falls above or below certain limits based on household size.  If your income is below the means test amount for your household size then you are generally allowed to file under Chapter 7 without any further showing.  If your income is above the means test amount, then a second more complicated analysis is required, which may still allow you to file under Chapter 7.  If your income is too high, then you will be required to file under Chapter 13, and repay your creditors a portion of the debts over a three to five year period.   We will perform the means test analysis of your income and advise you as to your eligibility to file under each chapter.  Debtors with income that varies over the year or that has recently declined significantly may find they must wait for some period of time if they wish to file under Chapter 7 instead of Chapter 13.  We will help you with that decision.  The current income limits for step one of the means test for Iowa are listed below.

                Household size                                                  Annual Income

                                1                                                                                     $39,918
                                2                                                                                     $55,087
                                3                                                                                     $64,143
                                4                                                                                     $72,701
                                5                                                              $80,201

                Add $7,500 for each person above 5.