Beginning on May 1, 2019, residents of Jefferson County, Alabama who are filing for Chapter 7 Bankruptcy will enjoy increases in national allowances for living , health , and housing . For single person households total percentage increase for living allowances is 80.5%. Birmingham residents will also enjoy a housing allowance increase of up to 9.1% depending on the family size. What this means for petitioners is that they will be allowed to reduce their disposable monthly income by these allowances which will increase their chances for Chapter 7 eligibility.
Eligibility for Chapter 7 is based upon the median income of families in the state. For example, if an Alabama family of 4 has gross annualized income below $78,456.00 they will automatically qualify for Chapter 7. If the same families income is above $78,456.00 they will have to reduce their gross income using the allowances.