Common Questions
Clear, data-backed answers to the most frequently asked questions
Navigating the Means Test
The means test was introduced by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to prevent high-income filers from abusing Chapter 7. The test uses Census Bureau median income data for your state and household size. If your current monthly income (averaged over six months before filing) is below the median, you automatically qualify for Chapter 7. Above-median filers must complete a detailed expense analysis using both actual expenses and IRS-approved standards.
Frequently Asked Questions
What is the bankruptcy means test?
The means test determines whether you qualify for Chapter 7 bankruptcy based on your income. It compares your household income over the past six months to your state's median income. If you are below the median, you pass automatically. If above, the test deducts allowed expenses to calculate disposable income.
What if I fail the means test?
If your income is too high for Chapter 7, you can still file Chapter 13 bankruptcy, which involves a repayment plan based on your disposable income. Some people also become eligible for Chapter 7 after a change in circumstances such as job loss or reduction in income.
Does the means test count my spouse's income?
If you are married and filing individually, your spouse's income is included in the household income calculation but their expenses can be deducted. If you file jointly, both incomes and expenses are combined. In some cases, filing individually can be more favorable.