The Bankruptcy Means Test, Explained

By Mike G.

There’s no single income limit for Chapter 7. The means test first compares your recent income with the median income for your state and household size. If you’re at or below it, the test ends there. If you’re above it, a second calculation subtracts allowed expenses to see whether enough would be left over to repay creditors.^[1][7]

This page explains how both steps work nationally and where to find the official figures for your state. For how Chapter 7 and Chapter 13 compare overall, see the bankruptcy guide.

What the means test is, and who takes it

The means test applies to individuals filing Chapter 7 whose debts are primarily consumer debts.^[1] A consumer debt is one taken on mainly for a personal, family or household purpose.^[2] It flags cases where the filer appears able to repay part of what’s owed, which the law calls a “presumption of abuse.”^[1] The term doesn’t mean anyone thinks you’re trying to cheat. It means the numbers suggest enough income to repay some debt.^[7]

Every individual Chapter 7 filer completes Official Form 122A-1, the Chapter 7 Statement of Your Current Monthly Income.^[4][7] Some people are exempt from the presumption and file a supplement, Form 122A-1Supp, instead of doing the calculations:^[5]

• People whose debts are mainly not consumer debts, such as debts that come mostly from running a business.^[1][5]
• Certain disabled veterans, if the debts arose mainly while on active duty or performing a homeland defense activity.^[1][5]
• Reservists and National Guard members called to active duty, or performing a homeland defense activity, for at least 90 days after September 11, 2001. The exemption lasts during that service and for 540 days afterward.^[1][5]

The two steps at a glance

Sources: the two forms and their instructions.^[4][6][7]

Step 1: your income vs. your state’s median

“Current monthly income” is a six-month average

The test doesn’t use your latest paycheck. It uses “current monthly income,” which is the average of what you received from all sources over the 6 full calendar months before you file, whether or not it’s taxable.^[2] The form gives an example: someone filing on September 15 uses March 1 through August 31.^[4]

What counts, per Form 122A-1:^[4]

• Gross wages, salary, tips, bonuses, overtime and commissions, before payroll deductions
• Alimony and maintenance
• Amounts others regularly pay toward your household expenses, including child support and regular help from a partner, roommate or relative
• Net income from a business, profession or farm, and from rental property
• Interest, dividends and royalties
• Unemployment compensation, pension and retirement income, and other income

What doesn’t count: benefits under the Social Security Act, payments to victims of war crimes, crimes against humanity or terrorism, and certain payments to members of the uniformed services tied to disability, combat-related injury or death.^[2][4] The U.S. Trustee Program lists the veterans’ benefits it confirms don’t need to be reported.^[3][7]

If you’re married and your spouse isn’t filing, your spouse’s income is usually still included, unless you’re legally separated or living apart for reasons other than avoiding the test.^[1][4] Step 2 then lets you subtract any part of that income not used for your household.^[6]

The comparison

The form multiplies current monthly income by 12 and compares the result with the median family income for your state and household size.^[4] For households larger than four, the law uses the four-person median plus a fixed amount for each extra person.^[1] If your figure is less than or equal to the median, there’s no presumption of abuse, and you don’t fill out the second form.^[4] No one can then ask the court to dismiss the case based on a presumption of abuse, and only the judge or the U.S. trustee can raise abuse on other grounds.^[1]

Where to find your state’s figure

The official median income figures are on the U.S. Trustee Program’s Means Testing page. They come from Census Bureau data, and the page lets you choose the period in which the case is filed, because the figures that apply depend on the filing date.^[3] It also holds the Step 2 expense figures. All of them are updated periodically, so a number copied from an older article may no longer apply. The bankruptcy clerk’s office may also have the list.^[4]

Step 2: the expense calculation (Form 122A-2)

Being above the median doesn’t rule out Chapter 7. It means filling out Form 122A-2, which subtracts allowed expenses from your income to find what the law calls monthly disposable income.^[6][7]

What gets deducted

• IRS National Standards for food, clothing and other items, and for out-of-pocket health care. These are set amounts, not your actual spending.^[1][6]
• IRS Local Standards for housing, utilities and transportation, which vary by county or region.^[6] The IRS publishes these as its Collection Financial Standards and points bankruptcy users to the U.S. Trustee Program’s versions.^[13]
• Certain actual expenses, such as taxes, required payroll deductions, health insurance, court-ordered payments, childcare, and some education and charitable costs.^[1][6]
• Secured debt payments, such as a mortgage or car loan: the total contractually due over the next 60 months, divided by 60.^[1][6]
• Priority debts, such as past-due child support, alimony and priority taxes: the total owed, divided by 60.^[1][6]

The thresholds

What’s left each month is multiplied by 60, for five years. For cases filed on or after April 1, 2025, the result is read like this:^[6][8]

• Under $10,275 (about $171 a month): no presumption of abuse.
• Over $17,150 (about $286 a month): a presumption of abuse.
• In between: a presumption of abuse arises only if the five-year figure is at least 25% of your nonpriority unsecured debt, such as credit cards and medical bills.

These dollar amounts are adjusted for inflation every three years.^[14] The form notes the next adjustment is due April 1, 2028, for cases filed on or after that date.^[6]

Special circumstances

A presumption of abuse can be rebutted only by special circumstances, such as a serious medical condition or a call to active military duty, that justify extra expenses or lower income with no reasonable alternative. Each item has to be documented, explained in detail and sworn to. It works only if the adjusted figure falls below the thresholds above.^[1][6]

If the presumption applies

A presumption of abuse isn’t automatic dismissal. The U.S. trustee reports to the court, within 10 days of the meeting of creditors, whether the case is presumed abusive.^[9] After notice and a hearing, the court can dismiss the case or, with the filer’s consent, convert it to Chapter 11 or Chapter 13.^[1] A filer can also choose to convert to Chapter 13 if eligible, and there’s no fee for that conversion.^[9]

Chapter 13 has its own version of the test. Form 122C-1 compares income with the same state medians to set the plan length: generally three years if below the median and five years if above.^[10][11][12] Above-median filers also complete Form 122C-2, which works out how much disposable income the plan may need to pay toward unsecured debts.^[7]

Common misunderstandings

• “Above the median means no Chapter 7.” No. Above-median filers go on to Step 2.^[7]
• “It’s based on what I earn now.” It’s a six-month average of gross income, including regular help from others, so a recent job loss or raise only partly shows up.^[2][4]
• “The look-back is fixed.” It’s the six full months before the filing month, so a different filing month means a different six months.^[2][4]
• “Household size doesn’t matter.” It sets which median applies.^[1]
• “Any income table online will do.” The figures that apply depend on the filing date, and only the U.S. Trustee Program’s tables are official.^[3]
• “Passing guarantees a discharge.” Even without a presumption, the court can still consider bad faith or the totality of the filer’s financial situation.^[1] Some debts also survive any discharge. See debts bankruptcy can’t erase.

Our guides on what bankruptcy costs and filing without a lawyer cover how an above-median income can affect both.

How the Debt Audit relates

The Debt Audit doesn’t run the means test. It asks for take-home pay, not six months of gross income, and never asks your state or household size. Its bankruptcy note follows a separate, simpler rule of our own: it appears when unsecured debt is large relative to a year’s take-home pay and paying it off on your own doesn’t look realistic.^[15] The note never recommends filing. The exact thresholds are on How the audit works.

Frequently asked questions

Related

• Bankruptcy: Chapter 7 vs. Chapter 13
• How much does it cost to file bankruptcy?
• Can you file bankruptcy without a lawyer?
• Debts bankruptcy can’t erase

Sources