If you are considering filing for bankruptcy, one of the first questions you may encounter is whether you are required to take the bankruptcy means test. This test plays a central role in determining which type of bankruptcy you may qualify for, particularly Chapter 7 or Chapter 13.
Understanding who must take the test—and how it works—can help you make informed decisions about your financial future.
Key Takeaways
- The bankruptcy means test is primarily used to determine whether a filer qualifies for Chapter 7 or must file Chapter 13.
- There is no single income cutoff for Chapter 7; what is the income limit for filing chapter 7 depends on state medians, household size, and allowed expenses.
- While Chapter 13 filers still complete a means test, it affects repayment terms rather than eligibility.
What Is the Bankruptcy Means Test?
The means test for bankruptcy is a financial evaluation created to prevent abuse of the bankruptcy system. Its main purpose is to determine whether a filer has enough disposable income to repay a portion of their debts.
If so, they may be required to file under Chapter 13 instead of Chapter 7.
The test compares your household income to the median income for a household of similar size in your state and then analyzes certain allowed expenses to determine disposable income.
Who Is Required to Take the Means Test?
Most individuals filing personal bankruptcy must take the means test bankruptcy calculation, but there are some important exceptions.
You generally must take the test if:
- You are filing Chapter 7 bankruptcy
- Your debts are primarily consumer debts (such as credit cards, medical bills, or personal loans)
You may not be required to take the test if:
- Your debts are primarily business-related
- You are a disabled veteran and your debts were incurred during active duty or homeland defense
- You are filing under Chapter 13 (the test is applied differently, as explained below)
Means Test Chapter 7: How Qualification Works
For those filing Chapter 7, the means test chapter 7 analysis occurs in two steps:
Step 1: Income Comparison
Your current monthly income is compared to your state’s median income. If your income is below the median, you generally qualify for Chapter 7 without further analysis.
Step 2: Disposable Income Calculation
If your income is above the median, the test subtracts allowable living expenses to determine whether you have sufficient disposable income to repay creditors. If the result shows limited ability to repay, you may still qualify for Chapter 7.
This process directly answers a common question: what is the income limit for filing chapter 7? The answer depends on your state, household size, and allowable expenses rather than a single fixed number.
Chapter 13 Means Test: A Different Purpose
The chapter 13 means test does not determine eligibility to file Chapter 13, since anyone with regular income may file. Instead, it determines:
- How long your repayment plan must last (three years or five years)
- How much disposable income must be paid to unsecured creditors
In Chapter 13 cases, the means test ensures that higher-income filers commit more income toward repaying debts over time.
How can a Bankruptcy Lawyer help
A bankruptcy lawyer can play a critical role in navigating the bankruptcy means test and avoiding costly mistakes. The attorney helps accurately calculate income, identify which sources of money must be included or excluded, and apply the correct state median standards.
They also ensure that all allowable expenses are properly claimed, which can significantly affect whether a filer passes the means test for bankruptcy or qualifies under the means test chapter 7 analysis. If the results suggest Chapter 7 is not available, a lawyer can explain how the Chapter 13 means test works and develop a strategy that aligns with the client’s financial goals while remaining fully compliant with bankruptcy law.
Contact SB Legal for more information on bankruptcy and the means test. We offer a free initial consultation.
Why the Means Test Matters
The bankruptcy means test is often the deciding factor between liquidation and repayment. Failing the test for Chapter 7 does not mean bankruptcy is unavailable—it usually means Chapter 13 may be the appropriate option. Each path has different implications for assets, repayment, and credit impact, which is why a bankruptcy lawyer is a good ally in these cases.
Frequently Asked Questions
Does the means test look at gross income or take-home pay?
The means test uses a defined version of “current monthly income,” which includes most sources of income before deductions but excludes certain benefits such as Social Security.
How far back does the means test review income?
The calculation typically looks at the average income from the six full calendar months prior to filing, not your income at the moment you file.
Can failing the means test stop me from filing bankruptcy altogether?
No. Failing the means test only limits access to Chapter 7. You may still file Chapter 13 and reorganize your debts through a court-approved repayment plan.