The Two-Part Test
The means test has two parts. Part 1 compares your income to the state median. If you're below, you pass -- no further calculation needed. If above, Part 2 determines whether your disposable income is low enough to still qualify for Chapter 7.
About 70% of Chapter 7 filers pass at Part 1 (below median). Of those who proceed to Part 2, many still qualify after expense deductions.
Part 1: Income vs. Median
Calculate your "current monthly income" (CMI): total household gross income over the past 6 full calendar months, divided by 6. Include wages, self-employment, rental income, pensions, unemployment, contributions from household members, and most other sources. Exclude Social Security.
Multiply CMI by 12 to annualize. Compare to your state's median income for your household size. Below median = pass.
Part 2: Disposable Income
If above median, subtract allowed expenses: IRS Local Standards (housing, utilities), IRS National Standards (food, clothing, personal care), transportation (ownership costs, operating costs), actual secured debt payments, priority debt payments, and other authorized deductions.
If monthly disposable income x 60 is less than $8,175, you pass. If more than $13,650, you fail (presumption of abuse). In between, the calculation gets more complex.
Real Example
Jane is a single filer in Missouri. Her 6-month average gross income is $3,800/month ($45,600 annualized). Missouri's 2026 median for a household of 1 is approximately $52,000. Jane is below median -- she passes Part 1 and qualifies for Chapter 7.
Tom is a single filer in Missouri earning $5,000/month ($60,000 annualized) -- above median. After IRS Standards and deductions, his disposable income is $150/month. $150 x 60 = $9,000. This is between $8,175 and $13,650, so further analysis is needed. His attorney determines he still qualifies after additional deductions.
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Last updated: April 2026. Not legal advice.
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