Updates To The National Standards Of Essential Living Expenses

The Department of Justice modified the necessary living expense thresholds on April 1, 2022, to reflect a national standard for all bankruptcy cases filed in the United States. A necessary living expense threshold is the point at which an individual’s expenses exceed their income and they are unable to pay their debts. Depending on household size, these thresholds represent the normal upper limit for particular expenses. This change was made to account for the increase in the cost of living over the past year.
Cases Filed Before April 1, 2022:
Household of 1 Total Living Expense: $723
Household of 2 Total Living Expense: $1,292
Household of 3 Total Living Expense: $1,473
Household of 4 Total Living Expense: $1,740
Cases Filed After April 1 ,2022:
Household of 1 Total Living Expense: $785
Household of 2 Total Living Expense: $1,410
Household of 3 Total Living Expense: $1,610
Household of 4 Total Living Expense: $1,900

The increase from April 1, 2022 to May 15, 2022 is significantly higher than the improvements made in the living expense update for cases submitted between May 14, 2021 and March 31, 2021. For example, a household of one with a case filed between April 1, 2021 and May 14, 2021 would be allowed a total budget of $715.00 for food, housekeeping supplies, clothes & services, personal care items & services, and miscellaneous expenses. That number has since grown to $785.00 just over a month later.
It is thought that this increase appears to reflect the fast rising cost of living as a result of inflation. Due to this, it is expected that these values may be modified more regularly as these prices rise. To learn more about how your eligibility for bankruptcy may be affected by these changes, contact a Hurst Bankruptcy lawyer for more information.