What Is This Means Test—and How Do I Pass It? Skip to main content

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What Is This Means Test—and How Do I Pass It?


If you’re considering a Chapter 7 bankruptcy, chances are you’ve already heard about the Means Test—the test that determines whether or not you qualify for a Chapter 7.

If you make less than the median income for your state, you don’t even have to worry about the means test!  (To find out what your state’s median income is, you can go to http://www.justice.gov/ust/eo/bapcpa/20091101/bci_data/median_income_table.htm).

If you make more than your state’s median income you may still be able to pass the means test by deducting certain expenses from your gross income.  You’re going to want to talk to a qualified bankruptcy attorney about this one, though—the means test is notoriously complicated!  Your attorney has the knowledge and experience to determine what amounts of your income have to be applied to the means test as well as what expenses may be deducted.

Like a tax return, the means test involves calculating your income and from that income, deducting your qualified expenses.  Like a good accountant, a good bankruptcy attorney can help you maximize your deductions!  With your attorney’s help, you’ll be able to deduct the allowable amounts for living expenses like groceries, clothing, housekeeping supplies and housing expenses to include rent, property tax, home maintenance, HOA dues, and utilities.  You’ll also be able to deduct certain amounts for transportation expenses like your car note, vehicle insurance, gas, and registration fees and other necessary expenses like taxes, health care and health insurance, childcare, and court-ordered payments like child support.  Finally, you’ll be able to deduct some of your debt payments: your mortgage, your home equity loan, and past due amounts on your mortgage or car note.

If your surplus income—the amount that’s left over after you subtract your deductions from your income—is not enough to repay a significant amount of your debts over the course of five years, you’ll probably qualify for a Chapter 7 bankruptcy.

See if you will pass the Means Test and qualify for Chapter 7 bankruptcy by contacting one of the qualified, experienced bankruptcy attorneys at the Law Offices of John T. Orcutt.  You can even schedule your appointment online at www.billsbills.com or you can call us at +1-919-646-2654.

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