Chapter 7 Means Test: Income, Expenses, and Disposable-Income Thresholds

The Chapter 7 means test decides whether your income is low enough to qualify for a Chapter 7 bankruptcy discharge. It compares your average income over the six full calendar months before you file to the median income for a household your size in your state. If you fall below the median, you pass and the analysis stops there. If you’re above it, a second step subtracts allowable expenses to see whether you have enough left over each month to repay creditors; too much, and the law presumes your filing is abusive and pushes you toward Chapter 13.

Who Has to Take the Means Test

Every individual Chapter 7 filer completes at least the first page of Official Form 122A-1, the Chapter 7 Statement of Your Current Monthly Income. Two groups can stop there and skip the full calculation.

The first is anyone whose debts are not primarily consumer debts. If most of what you owe comes from a failed business or commercial investments rather than credit cards, medical bills, and personal loans, the presumption-of-abuse analysis does not apply.

The second is certain veterans and service members. If you have a VA disability rating and your debts were primarily incurred during active duty or homeland defense activity, the court cannot dismiss or convert your case based on the means test. Reservists and National Guard members called to active duty for at least 90 days after September 11, 2001 are exempt during service and for 540 days after returning.¹ Filers claiming either exemption file Official Form 122A-1Supp, and once the exemption is confirmed the case proceeds without any disposable-income analysis.²

Step 1: Calculate Your Current Monthly Income

“Current monthly income” is a term of art, not a snapshot of what you earn today. It’s the average of your total gross income from every source over the six full calendar months before the month you file.³ File on July 15 and the window runs from January 1 through June 30. Anything you earn from July 1 onward does not count.

The average captures wages before taxes, business income, interest, dividends, rental income, and regular household contributions from anyone living with you, such as a partner who pays part of the rent. Because the number is historical, a debtor who just lost a job can still show a high average from paychecks earlier in the window.

Income That Doesn’t Count

Social Security benefits are excluded entirely, which matters for retirees and people receiving Social Security disability.³ The HAVEN Act of 2019 added exclusions for VA disability compensation, combat-related special compensation, disability severance pay, and survivor benefits tied to a service member’s death.⁴ Disability-related military retired pay is excluded only to the extent it exceeds what the veteran would have received retiring without a disability.⁵

If You’re Married and Filing Alone

A non-filing spouse’s income gets included in the household total, which can push your numbers above median even when your spouse’s earnings don’t actually support your household. The marital adjustment on Form 122A-2 lets you subtract the portion of your spouse’s income that goes to expenses unrelated to your household, such as their own payroll taxes, student loans, car payments on a vehicle titled solely to them, or child support for children from a previous relationship.⁶ You cannot claim the same expense as both a marital adjustment and a household deduction later in the test.

Step 2: Compare Your Income to the State Median

Multiply your current monthly income by 12 to get an annualized figure, then compare it to the median income for a household of your size in your state. The U.S. Trustee Program publishes the median tables and updates them periodically; the current figures apply to cases filed on or after April 1, 2026.⁷

Fall below the median and you pass. You don’t fill out Form 122A-2, no presumption of abuse arises, and your Chapter 7 case moves forward.³ Most Chapter 7 cases end the analysis here.

Exceeding the median is not disqualifying. It moves you to the detailed expense phase on Form 122A-2.⁶

Step 3: Subtract Allowable Expenses

When your income is above median, the law lets you deduct a mix of standardized and actual expenses to see what disposable income really remains.

The IRS publishes National Standards for food, clothing, and out-of-pocket health care by family size, and Local Standards for housing and transportation that vary by region. You claim the standardized amount even if your actual spending is lower.⁸ Other Necessary Expenses, such as childcare, telecommunications, and education, use your actual documented costs.

Beyond the standards, you deduct what you actually pay for:

Mandatory payroll deductions: income taxes, Social Security and Medicare withholding, required union dues.
Health insurance premiums, disability insurance, and HSA contributions for you, your spouse, and your dependents.
Secured debt payments on mortgages, car loans, and other secured debts, calculated by totaling what’s contractually owed over the next 60 months and dividing by 60.⁸
Priority debts: domestic support obligations like child support and alimony, and priority tax debts.

One deduction people wrongly assume they can take: voluntary 401(k) contributions. Only retirement contributions your employer requires as a condition of employment count on the means test.⁶

Subtract every allowable deduction from your current monthly income, and the number left over is your monthly disposable income.

Step 4: The Disposable-Income Thresholds

Your monthly disposable income, multiplied by 60, is measured against two dollar amounts. These figures were adjusted for inflation effective April 1, 2025.⁹

Below $10,275 over 60 months: no presumption of abuse. You qualify for Chapter 7 even though your income exceeded the median.
Between $10,275 and $17,150: the presumption triggers only if that amount can pay at least 25% of your nonpriority unsecured debt.
$17,150 or more (roughly $286 a month): the presumption triggers automatically, regardless of how much unsecured debt you owe.

When the presumption triggers, the U.S. Trustee can move to dismiss your case or ask the court to convert it to Chapter 13, which commits your disposable income to a three- to five-year repayment plan, depending on whether your income is above or below the state median.¹⁰

Rebutting a Presumption of Abuse

A triggered presumption is not an automatic denial. You can rebut it by proving “special circumstances” the formula doesn’t capture. The statute names two examples: a serious medical condition and a call to active military duty. Courts have considered others, with real disagreement among judges about how unusual the circumstances need to be.¹

To rebut, you itemize each additional expense or income adjustment, document each one with supporting records, explain in detail why the circumstances are necessary and reasonable with no alternative, and attest under oath. The rebuttal succeeds only if, after the adjustments, your 60-month disposable income drops below the applicable threshold.¹ In practice this is a hard bar. Some courts demand extraordinary events like a catastrophic accident or terminal diagnosis; others focus on whether you have any meaningful ability to repay. Courts often reject increased commuting costs from voluntarily living far from work, and large student loan payments get mixed results.

Timing Your Filing Date

Because the lookback window is six full calendar months before the month you file, the date you choose can change the result. The window always ends on the last day of the month before your filing month. File on September 15 and the window covers March 1 through August 31; anything from September 1 through September 15 is irrelevant.

That creates a real planning lever. If a bonus, severance payment, or heavy overtime landed in a particular month, waiting until that month rolls out of the six-month window lowers your average. If you expect a raise or a higher-paying job to start soon, filing before the new income lands keeps it out of the calculation. For borderline filers, this is often where a bankruptcy attorney earns their fee.

Reporting Honestly

Every bankruptcy form is signed under penalty of perjury. Inflating expenses, hiding income, or omitting assets is not just grounds for dismissal; it’s a federal crime. Concealment of assets and false oaths under 18 U.S.C. § 152 carry up to five years in prison, a fine, or both.¹¹ Bankruptcy fraud under 18 U.S.C. § 157 carries the same maximum penalty.¹² The court can also deny your discharge entirely, leaving every debt intact with a bankruptcy filing on your record. Honest mistakes can be fixed with amended schedules; deliberate misrepresentation is treated as fraud, and trustees are experienced at spotting inflated expense claims that don’t match bank statements.

1
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
2
United States Courts. Official Form 122A-1Supp – Statement of Exemption from Presumption of Abuse Under 707(b)(2)
3
United States Courts. Official Form 122A-1 – Chapter 7 Statement of Your Current Monthly Income
4
Office of the Law Revision Counsel. 11 USC 101 – Definitions
5
United States Department of Justice. HAVEN Act – Frequently Asked Questions
6
United States Courts. Official Form 122A-2 – Chapter 7 Means Test Calculation
7
United States Department of Justice. Means Testing
8
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
9
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
10
United States Courts. Chapter 13 Bankruptcy Basics
11
Office of the Law Revision Counsel. 18 USC 152 – Concealment of Assets; False Oaths and Claims
12
United States Department of Justice. Criminal Resource Manual 879 – Bankruptcy Fraud 18 USC 157