The Means TestWhen you decide to file for Bankruptcy, you should take a test known as the “means test” which is used to figure out whether your level of income is low enough to qualify you for Chapter 7 Bankruptcy.


The test is formulated to evaluate your need for bankruptcy and to keep people with higher incomes from filing for Chapter 7 Bankruptcy.  The bankruptcy filers who have a higher income can use Chapter 13 Bankruptcy to lessen their debt, while Chapter 7 is designed for people who need to eliminate debt.

How Does It Work?

It is vital to remember that you do not necessarily need to be destitute to qualify for Chapter 7.  The Means Test was designed to limit the number of people who use Chapter 7 Bankruptcy and reserve it for those who truly need it.

It uses a formula that deducts your expenses from income over a period of six months to determine how much “disposable income” you have available.  The test requires your disposable income to be under a certain level, which is determined by your expenses, the size of your household, the amount of debt you have and several other factors.


If your monthly income is less than the median income for the state for your household, you immediately qualify and you do not need to continue with the test.  You can file for Chapter 7 Bankruptcy to eliminate your debt.

If you have a higher median income, you need to continue with the test, which goes into much more detail to determine whether you can apply.  It determines this by evaluating the amount of disposable income you have, and whether you can afford to pay off your debt at a reduced rate.  You need to remember that the median levels are different in different counties, and cities based on specific criterion.

You should check online for a “Chapter 7 Means Test Online Calculator” such as the one on and consult your bankruptcy lawyer for more information on whether you qualify for Chapter 7 Bankruptcy or need to consider Chapter 13 Bankruptcy.