Quick Answer
The means test determines whether you qualify for Chapter 7 bankruptcy. If your household income is below your state's median, you pass automatically. If it's above, you may still qualify after deducting allowed expenses. Use our calculator to check.
What Is the Means Test?
The means test is a formula that determines whether your household income is low enough to file Chapter 7 bankruptcy. It was added to the Bankruptcy Code in 2005 by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and is codified at 11 U.S.C. Section 707(b).
Before 2005, almost anyone could file Chapter 7 regardless of income. Congress decided that higher-income debtors who could afford to repay at least some of their debts should not be allowed to wipe everything clean through Chapter 7. The means test was their solution -- a standardized income-and-expense formula that separates debtors who genuinely cannot pay from those who can.
The good news
The vast majority of people who file Chapter 7 pass the means test. If your income is below the median for your state and household size, you pass automatically. Even if your income is above the median, many filers still pass after deductions for housing, transportation, taxes, healthcare, and other allowed expenses. The means test sounds scarier than it is.
The Two-Step Process
- Compare your income to the state median. Add up all income you received during the 6 full calendar months before filing. Annualize it. If it is at or below the median income for your state and household size, you pass. Done. Full walkthrough →
- If above median, calculate disposable income. Subtract allowed deductions -- IRS living expense standards, taxes, health insurance, mortgage/car payments, childcare, and more. If your remaining disposable income is below the threshold, you still pass. See all deductions →
The Core Rule
If your income is above your state's median for your household size, and your disposable income (after allowed deductions) exceeds certain thresholds, there is a "presumption of abuse." The court will presume your Chapter 7 filing is abusive and will either dismiss it or convert it to Chapter 13 -- unless you can show special circumstances.
Explore Each Topic
How the Means Test Works
The two-step process explained. What counts as income, what does not (Social Security is excluded), and how the 6-month lookback period works.
Median Income by State
Current Census Bureau median income figures for all 50 states + DC, broken down by household size. Updated every 6 months.
Means Test Deductions
IRS National Standards, Local Standards, and actual expense deductions. Housing, transportation, food, healthcare, childcare, taxes, and more.
What If You Fail?
Presumption of abuse, rebutting the presumption, special circumstances (military, disability), and Chapter 13 as an alternative.
Chapter 13 Means Test
How the means test differs for Chapter 13. It does not block eligibility -- it determines whether your plan runs 3 years or 5 years.
Common Mistakes
Wrong household size, forgetting Social Security exclusion, missing deductions, using gross instead of net. Avoid these errors.
Above Median Income?
Being above the median does NOT disqualify you from Chapter 7. The full means test uses deductions for housing, cars, taxes, insurance, and more. Many above-median filers still pass.
Self-Employed Means Test
How business income and expenses affect the means test. Net income (not gross), the 6-month lookback, strategic timing, and avoiding the double-count trap.
Household Size
Who counts in your household? The answer varies by circuit. Three court approaches, the non-filing spouse's income, and the marital adjustment.
Means Test Calculator
Enter your state, household size, and annual income. See instantly whether you are above or below the state median. Free, private, no data collected.
Who Is Exempt from the Means Test?
The means test only applies to individual debtors with primarily consumer debts. Several categories of filers are exempt:
- Primarily business debts -- If more than half your debts are business debts (not consumer debts), the means test does not apply. Section 707(b) only covers cases where debts are "primarily consumer debts."
- Disabled veterans -- Under Section 707(b)(2)(D)(i), the means test does not apply to disabled veterans whose indebtedness occurred primarily during a period of active duty or homeland defense activity.
- Reservists and National Guard -- Under Section 707(b)(2)(D)(ii), members called to active duty for at least 90 days after September 11, 2001 are exempt if they file within the specified period after release.
- Below-median income -- If your annualized income is at or below the state median, you pass at Step 1 automatically. You still file Form 122A-1, but the full calculation is not required.
The Forms You Will File
The means test is completed on official bankruptcy forms filed with your petition:
- Form 122A-1 (Chapter 7 Statement of Your Current Monthly Income) -- calculates your CMI and compares it to the state median. Every Chapter 7 individual filer completes this form.
- Form 122A-2 (Chapter 7 Means Test Calculation) -- only required if you are above the median. Subtracts allowed deductions and determines whether a presumption of abuse arises.
- Form 122C-1 and 122C-2 -- the Chapter 13 repayment plan guide equivalents, which determine plan length and disposable income commitment rather than eligibility.
Key Facts at a Glance
Quick Reference
- The means test was created by BAPCPA (2005) and is codified at 11 U.S.C. Section 707(b)
- It uses your average income over the 6 full calendar months before filing
- Social Security income is excluded from the calculation
- Median income figures are published by the U.S. Trustee at justice.gov/ust
- If you are below the median, you pass automatically
- If you are above the median, deductions for housing, transportation, taxes, healthcare, and other expenses may still bring you below the threshold
- Failing the means test does not mean you cannot file bankruptcy -- Chapter 13 has no means test
- The presumption of abuse can be rebutted with special circumstances
Not Legal Advice
This website provides general educational information about the bankruptcy means test under 11 U.S.C. Section 707(b). It is not legal advice. Bankruptcy law is complex, income calculations are fact-specific, and individual circumstances vary. Consult a licensed bankruptcy attorney in your jurisdiction before making any filing decisions.