You qualify for Chapter 7 under the bankruptcy means test if your household income, averaged over the six full calendar months before you file, is at or below the median income for your state and family size. If your income is higher than the state median, you can still qualify, but a second calculation using standardized IRS expense figures has to show that your projected disposable income over the next five years is low enough to fall outside the “presumption of abuse” thresholds. Income is only part of eligibility; a pre-filing counseling course and any waiting period from a prior bankruptcy also have to be satisfied.
How Your Income Is Measured
The means test doesn’t use your current paycheck or your most recent tax return. It uses what the bankruptcy code calls “current monthly income,” which is the average of all gross income you received during the six full calendar months before your filing date.1United States Courts. Chapter 7 – Bankruptcy Basics That six-month average is then annualized for the comparison.
Income for this purpose is broader than wages. It includes business income, rental income, interest, dividends, and regular financial contributions from other household members. Social Security benefits are excluded from the calculation.
Timing matters. Because the window is the six full months before filing, a raise, a bonus, a period of unemployment, or a seasonal drop in earnings can move you above or below the median depending on when you file.
Comparing Your Income to the State Median
You report your current monthly income on Official Form 122A-1 and compare the annualized figure against the median for your state at your household size. The U.S. Trustee Program publishes and updates those median figures.2U.S. Department of Justice. Median Income – U.S. Trustee Program
If your income is at or below the median for your state and family size, you pass the means test. No further income analysis is required, and you can move forward with Chapter 7.1United States Courts. Chapter 7 – Bankruptcy Basics
The Full Calculation If You’re Over the Median
When your income is above the state median, you continue to Form 122A-2. This is the calculation that determines whether your filing carries a “presumption of abuse” — meaning the court presumes you can afford to repay some of your debts and belongs in Chapter 13 instead.1United States Courts. Chapter 7 – Bankruptcy Basics
Form 122A-2 subtracts allowed monthly expenses from your current monthly income to produce a monthly disposable income number. The expenses are not what you actually spend. They come from IRS-published national and local standards for categories like housing, food, transportation, and health care. You then multiply the monthly disposable income figure by 60 to project it across five years.
Three outcomes are possible based on that 60-month figure:
- Below $10,275: no presumption of abuse. You pass the means test.
- $17,150 or more: presumption of abuse applies. The court will typically expect you to file Chapter 13 with a repayment plan.
- Between $10,275 and $17,150: presumption of abuse applies only if your projected disposable income would cover at least 25 percent of your nonpriority unsecured debts.
Even when the presumption of abuse is triggered, it isn’t necessarily the end of the road. You can try to rebut it by showing “special circumstances,” such as a serious medical condition or a call to active military duty, that justify additional expenses or reduce your income.
Who Skips the Means Test Entirely
Two groups don’t have to take the means test at all.
The first is debtors whose obligations are primarily business debts rather than consumer debts. The means test applies only to individuals whose debts are primarily consumer debts, meaning credit cards, medical bills, and personal loans. If most of what you owe stems from a business, you skip the means test.
The second is certain disabled veterans. A veteran with a disability rating of at least 30 percent from the Department of Veterans Affairs, or who was discharged due to a disability sustained in the line of duty, is exempt from the means test, but only for debts that were incurred while on active duty or during a homeland defense activity.
If either exception applies to you, you file a separate statement of exemption in place of the means test forms.
Other Qualifying Requirements Beyond Income
Passing the means test isn’t the whole eligibility picture. Two other requirements can block a filing regardless of your income.
Pre-Filing Credit Counseling
Before filing a Chapter 7 petition, you have to complete an individual or group credit counseling briefing from a nonprofit agency approved by the U.S. Trustee’s office.3Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor The briefing has to take place within the 180-day period ending on your filing date. Sessions are available by phone or online, usually run about an hour, and typically cost $20 to $50. The agency issues a certificate of completion that you file with the court. Without a valid certificate inside that 180-day window, the case will be dismissed.4Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
Waiting Periods After a Prior Bankruptcy
If you’ve filed before, timing rules can prevent a new discharge even when you’d otherwise qualify. The relevant waiting period depends on what type of discharge you received last time, and it’s measured from the filing date of the earlier case, not the date the discharge was granted:
- Prior Chapter 7 discharge: you have to wait eight years before filing a new Chapter 7 that will result in a discharge.5Office of the Law Revision Counsel. 11 USC 727 – Discharge
- Prior Chapter 13 discharge: you have to wait six years. The six-year bar doesn’t apply if you paid 100 percent of unsecured claims in the prior plan, or paid at least 70 percent and the plan was proposed in good faith as your best effort.5Office of the Law Revision Counsel. 11 USC 727 – Discharge
A separate 180-day refiling bar applies when a previous case was dismissed rather than discharged. You can’t file again within 180 days if the court dismissed the prior case because you failed to appear or follow court orders, or if you voluntarily dismissed after a creditor sought relief from the automatic stay.6Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
When Qualifying Still Won’t Solve Your Problem
Qualifying to file is not the same as getting relief from every debt you owe. Some obligations survive a Chapter 7 discharge no matter how cleanly you pass the means test, and if most of what you owe falls into these categories, filing may accomplish very little. The most common non-dischargeable debts include:7Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Child support and alimony, and other domestic support obligations.
- Most student loans, unless you file a separate lawsuit within the bankruptcy and prove that repayment would cause undue hardship.
- Recent income taxes, unless the return was due more than three years before filing, was filed on time, and the tax was assessed more than 240 days before the petition.8Internal Revenue Service. Declaring Bankruptcy
- Debts obtained through fraud, false pretenses, or a materially false written financial statement.
- Criminal fines and restitution.
- Debts for death or personal injury caused by driving under the influence.
- Consumer debts over $500 for luxury goods charged within 90 days of filing, and cash advances over $750 taken within 70 days, which are presumed non-dischargeable.7Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
It’s worth checking your debts against this list before you invest time in the means test. If the bulk of your balances are non-dischargeable, passing the test doesn’t get you where you’re trying to go.