• Home
  • Bankruptcy Lawyer Rich Feinsilver
  • File For Chapter 7
  • File For Chapter 13
    • Modifying Second Mortgage Liens
  • Debt Consolidation Options
  • Student Loans
  • Blog
  • Contact Rich

Long Island Bankruptcy Lawyer - Chapter 7 Bankruptcy - Chapter 13 Bankruptcy

Filing Chapter 7 Bankruptcy and Chapter 13 Bankruptcy from a Long Island Bankruptcy Lawyer

New Means Test Housing Allowances Levels Playing Field for Long Island Renters

November 20, 2011 By Richard S. Feinsilver

Most individuals or couples filing for protection under either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy are required to meet certain income eligibility requirements under the “Means Test.”

Under the Means Test, you must first determine if your average monthly income for the last six months is below the median income for your state, based upon the size of your household.

If your average monthly income for the past six months is below the median income in New York, you have passed the first hurdle, and so long as you meet the other eligibility requirements, you can file for protection under Chapter 7 Bankruptcy.

If your average monthly income for the past six months is above the median income in New York, you must proceed to the second hurdle – do you have the ability to repay a portion of your debt?

The second hurdle is the determination of your ability to repay a portion of your debt. Under the law, you are required to perform an analysis of your income and expenses (based upon certain Internal Revenue Service guidelines) – the Means Test..

With respect to expenses, some expenses are deducted on a dollar for dollar basis, others on an allocation basis, based upon family size and county of residence. The largest single deduction on an allocation basis for renters has always been housing/shelter expense.

Prior to November 1, 2011, renters who reside in Nassau and Suffolk Counties were required to deduct a ridiculously low amount for shelter expense as compared to homeowners who have mortgage obligations.

As of November 1, 2011, the playing field for Long island renters has now been leveled. Housing allowances for Nassau and Suffolk County residents have increased by 30% on average

The following is a chart of comparing the allowances:

Household              1                         2                         3                      4
                             Pre     Post      Pre     Post       Pre     Post        Pre      Post
Nassau County    1545   2027    1814    2300    1911    2508     2131     2796
Suffolk County     1385   1806    1626    2121     1715    2235     1911     2492

The net effect of this change is that, even if your income is above the median for the State, residents of Nassau and Suffolk Counties has been provided with an additional $6,000.00 allowance based upon the cost of housing on Long Island. This can make the difference between qualifying for Chapter 7 Bankruptcy and discharging all of your dischargeable debt and filing for Chapter 13 Bankruptcy and having to devote all of your net disposable income to a repayment plan of up to five years.

If you have been previously advised that you are “on the border” to qualify for Chapter 7 Bankruptcy, it’s time to look again and see if you qualify under the new housing allowances.

Special Note: Means Test Allowances are updated every six months.  The above allowances will only apply to cases for between November 1, 2011 and April 30, 2012.

 

Previous Article
Next Article

Tips For Hiring a Bankruptcy Lawyer

A good bankruptcy lawyer will understand your financial situation and provide you with the best advice. He or she will review your financial records and will handle your interactions with the trustee and creditors. Additionally, your attorney will be … Read more...

Four Common Financial Mistakes

When we talk about personal finance it’s usually more about what you should be doing now, but too often the mistake has already been made. Many people regret what they didn't know when they were younger. As a society, we are seeing the impact the … Read more...

It Pays To Be Familiar With Your Credit Report

It pays to be familiar with your credit report. The information it contains determines your credit score, your ability to access credit and loans, and even your chances of landing a job or signing a lease. It's a good idea to check your credit report … Read more...

Our Office Locations

Nassau County

One Old Country Road
Suite 347
Carle Place, New York 11514
Appointment Only
855-334-6529 (local)

Click for Map
Eastern Suffolk County

80 Orville Drive
Suite 100
Bohemia NY 11716
Appointment Only
855-334-6529 (local)

Click for Map

We are a debt relief agency serving individuals and businesses located in New York’s Queens, Nassau and Suffolk Counties on Long Island including the towns of Hempstead, North Hempstead, Oyster Bay, Huntington, Islip, Babylon, Smithtown, Brookhaven, Riverhead and the North Fork (Montauk) and South Fork (Hamptons) of Long Island. We assist people and businesses to file for relief under the bankruptcy codes. For a full list of the areas Richard Feinsilver and his associates serve, please check this areas served page.

This is an advertisement for legal services provided by an attorney serving the residents and businesses of the counties of Queens, Nassau and Suffolk (Long Island) in the state of New York.

Copyright © 2025 · Genesis Framework · WordPress · Log in