Bankruptcy Means Test
Determine Chapter 7 bankruptcy eligibility by comparing household income to state median income.
Frequently Asked Questions
What is the bankruptcy means test?+
The means test determines whether you qualify for Chapter 7 bankruptcy (debt discharge) or must file Chapter 13 (repayment plan). It compares your income against the median for your state and household size. If you are below the median, you pass automatically. If above, a detailed calculation using IRS standard deductions determines your disposable income.
What income does the means test count?+
The means test uses your "current monthly income" (CMI) — the average of all income sources over the 6 calendar months before filing. This includes wages, commissions, bonuses, self-employment income, rental income, pensions, unemployment benefits, and alimony received. Social Security benefits are excluded.
What if I fail the means test?+
If you fail, there is a presumption of abuse for Chapter 7. You can still file Chapter 13 (a 3-5 year repayment plan), or you can rebut the presumption by showing special circumstances (serious medical conditions, active duty, etc.). A bankruptcy attorney can help determine your options.
How often do the median income figures change?+
The DOJ U.S. Trustee Program updates state median income figures about every 6 months based on Census Bureau data. This calculator uses the latest figures effective April 1, 2026. The disposable income thresholds ($9,075/$15,150) are adjusted every 3 years.
What is the difference between Chapter 7 and Chapter 13?+
Chapter 7 discharges most unsecured debts (credit cards, medical bills) within 3-4 months but may require liquidating non-exempt assets. Chapter 13 creates a 3-5 year repayment plan based on your disposable income — you keep your assets but must make monthly payments. Chapter 7 requires passing the means test; Chapter 13 has debt limits (as of April 2025, $526,700 unsecured / $1,580,125 secured).
What deductions are allowed?+
The means test allows IRS standard living expense deductions (food, clothing, personal care), out-of-pocket medical expenses ($84/month under 65, $149/month over 65), transportation (ownership and operating costs), and actual expenses for housing, utilities, taxes, health insurance, childcare, and court-ordered payments. These deductions reduce your disposable income.
Does Social Security count as income?+
No. Social Security benefits (retirement, disability, SSI) are expressly excluded from the means test income calculation under 11 U.S.C. § 101(10A). This is one of the most important exclusions — if your only income is Social Security, you automatically pass the means test.
Can I still file Chapter 7 if I fail the means test?+
Possibly. Failing creates a rebuttable presumption of abuse. Special circumstances that may overcome the presumption include: serious medical conditions, active duty, or other documented events beyond your control that reduce income or increase expenses. Additionally, if your debts are primarily business debts (not consumer), the means test does not apply at all.