What Is the Means Test?
The bankruptcy means test is an income-based calculation created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Before BAPCPA, nearly anyone could file Chapter 7 regardless of income. Congress introduced the means test to prevent higher-income filers from using Chapter 7 to discharge debts they could theoretically repay through a Chapter 13 plan.
The means test is codified at 11 U.S.C. § 707(b)(2). Every individual Chapter 7 filer must complete it. If you fail, the court will either dismiss your case or convert it to Chapter 13. If you pass, you proceed through the standard Chapter 7 process -- and with a 93%+ discharge rate, the odds are overwhelmingly in your favor.
The means test applies only to individuals with primarily consumer debts. If your debts are primarily business debts, you are exempt from the means test entirely and can file Chapter 7 regardless of income.
The good news: The majority of Chapter 7 filers pass the means test. According to court data, roughly 80% of means test filers are below their state's median income and qualify automatically at Step 1 without needing the detailed expense calculation.
The Two-Step Process
The means test has two distinct steps. Most filers only need Step 1.
Step 1: The Median Income Comparison
Calculate your current monthly income (CMI) -- the average of your gross income from all sources over the 6 full calendar months before your filing date. Multiply by 12 to annualize.
Compare this annualized income to the median household income for your state and household size, published by the Census Bureau and updated by the U.S. Trustee Program.
If your income is at or below the median: you pass. You qualify for Chapter 7 and do not need to complete Step 2. Done.
If your income is above the median: proceed to Step 2.
Step 2: The Disposable Income Calculation
This step determines whether you have enough disposable income to fund a hypothetical Chapter 13 plan. From your monthly income, subtract:
- IRS National Standards -- food, clothing, household supplies, personal care, miscellaneous
- IRS Local Standards -- housing and utilities (varies by county), transportation (varies by region)
- Actual secured debt payments -- mortgage, car loan, divided by 60 months
- Priority debt payments -- domestic support obligations, recent taxes, divided by 60
- Certain other deductions -- health insurance, disability insurance, HSA contributions, education expenses for dependent children, charitable contributions up to 15% of gross income, additional food/clothing up to 5% of national standards
The result is your monthly disposable income (MDI).
If MDI x 60 is less than $9,375 (i.e., less than $156.25/month): you pass.
If MDI x 60 is more than $15,625 (i.e., more than $260.42/month): you fail. A "presumption of abuse" arises and your Chapter 7 case will likely be dismissed or converted.
If MDI x 60 is between $9,375 and $15,625: you pass only if your disposable income is less than 25% of your total nonpriority unsecured debt. Otherwise, the presumption of abuse applies.
What Income Counts?
The means test uses a specific definition of income called "current monthly income" (CMI), defined at 11 U.S.C. § 101(10A). It includes virtually all income from all sources:
| Included in CMI | Excluded from CMI |
|---|---|
| Wages, salary, tips, bonuses | Social Security benefits (all types) |
| Overtime and commissions | Payments to terrorism victims (18 U.S.C. § 3664) |
| Business and self-employment income | War crime victim payments |
| Rental and investment income | |
| Pension and retirement income | |
| Unemployment benefits | |
| Workers' compensation | |
| Alimony and child support received | |
| Regular contributions from others (including non-filing spouse) | |
| Annuity payments |
Critical detail: the 6-month lookback. The means test uses your income from the 6 full calendar months before your bankruptcy filing date -- not your current income. If you recently lost a job or took a pay cut, timing your filing strategically can make the difference between passing and failing. For example, if you lost your job in January and file in August, the 6-month lookback (February-July) captures several months of lower income.
2025-2026 Median Income Thresholds by State
The U.S. Trustee Program publishes updated median income figures. Below are representative thresholds for selected states. These figures change periodically -- use the free means test calculator at meanstest.org for the most current data.
| State | 1 Person | 2 Person | 3 Person | 4 Person |
|---|---|---|---|---|
| Alabama | $48,736 | $60,508 | $68,883 | $80,489 |
| California | $66,975 | $87,683 | $92,064 | $103,191 |
| Florida | $53,839 | $67,703 | $72,436 | $85,645 |
| Illinois | $58,453 | $74,520 | $86,388 | $98,441 |
| Kansas | $54,345 | $70,253 | $80,672 | $95,184 |
| Massachusetts | $70,759 | $92,478 | $104,583 | $127,144 |
| Mississippi | $42,026 | $53,810 | $59,549 | $75,137 |
| Missouri | $51,812 | $66,461 | $77,538 | $90,785 |
| New Jersey | $68,476 | $88,729 | $105,491 | $125,669 |
| New York | $61,823 | $81,547 | $93,052 | $108,463 |
| Ohio | $51,294 | $65,178 | $76,399 | $92,568 |
| Texas | $55,735 | $71,847 | $78,361 | $93,407 |
Representative thresholds based on Census Bureau data used by the U.S. Trustee Program. Figures are approximate and subject to periodic updates. For each additional household member beyond 4, add approximately $9,900. Always verify current figures before filing.
What Happens If You Fail the Means Test?
Failing the means test does not mean you cannot file bankruptcy. It means you cannot file Chapter 7. You still have several options:
Option 1: File Chapter 13 Instead
Chapter 13 has no income ceiling. You can file regardless of how much you earn. The trade-off: instead of a 3-4 month liquidation, you enter a 3-5 year repayment plan. The discharge rate is roughly 40-50% nationally, compared to 93%+ for Chapter 7. But for above-median filers, it may be the only path to discharge.
Option 2: Wait and Refile
Because the means test uses a rolling 6-month average, your eligibility can change over time. If your income drops -- due to job loss, reduced hours, retirement, or any other reason -- you may pass the means test by waiting a few months for the higher-income period to fall out of the lookback window.
Option 3: Special Circumstances
Even if the math says you fail, you can rebut the presumption of abuse by demonstrating "special circumstances" under 11 U.S.C. § 707(b)(2)(B). These might include:
- A serious medical condition requiring significant ongoing expenses
- A call or order to active military duty
- Impending job loss or documented income reduction
- Extraordinary caregiving expenses
You must document these circumstances with specificity and show that they justify additional expenses or adjustments to income that would bring your disposable income below the threshold.
Option 4: Business Debt Exception
The means test applies only to debtors whose debts are primarily consumer debts. If more than 50% of your total debts are business-related, the means test does not apply and you can file Chapter 7 regardless of income. This is particularly relevant for small business owners, self-employed individuals, and anyone who personally guaranteed business obligations.
Special Exemptions: Military and Disabled Veterans
Congress carved out important exceptions for those who have served:
Disabled Veterans (11 U.S.C. § 707(b)(2)(D))
If you are a disabled veteran with a VA disability rating of 30% or higher, and your debts were incurred primarily while you were on active duty or performing homeland defense activity, you are completely exempt from the means test. You qualify for Chapter 7 regardless of income.
For disabled veterans: This exemption is one of the strongest consumer protections in the Bankruptcy Code. If you have a 30%+ VA disability rating and your debts arose during service, the means test simply does not apply to you. No calculation needed.
National Guard and Reserve Members (11 U.S.C. § 707(b)(2)(D)(ii))
National Guard members and reservists who were called to active duty or performed homeland defense activity for at least 90 days after September 11, 2001 are exempt from the means test during their period of active duty and for 540 days after they return.
Post-9/11 Service Members
Service members who served on active duty after September 11, 2001 for at least 90 days may qualify for a temporary exclusion of certain military-related income from the means test calculation, even if they do not qualify for the full exemption. This includes combat pay, hazardous duty pay, and certain deployment-related income.
Common Means Test Mistakes
These are the errors that most frequently cause problems on the means test:
1. Using Current Income Instead of the 6-Month Average
The means test does not use your income right now. It uses the average of the 6 full calendar months before filing. If you earned $80,000 last year but lost your job 2 months ago, your means test income still reflects the higher earning months. Timing your filing to let higher-income months fall out of the lookback window is a legitimate and common strategy.
2. Forgetting Non-Filing Spouse Income
If you are married but filing alone, your non-filing spouse's income is still included in the means test calculation for determining whether you are above or below median. However, there is a "marital adjustment" deduction on Form 122A-2 that allows you to subtract the portion of your spouse's income that is not regularly contributed to household expenses.
3. Including Social Security
Social Security benefits are not included in current monthly income. This is explicitly stated in 11 U.S.C. § 101(10A). If you or your attorney include Social Security on the means test, you are overstating your income and may fail when you should pass.
4. Using National Standards for Housing
Housing and utility allowances use IRS Local Standards, which vary by county. Using the wrong county or applying national averages instead of local standards can significantly affect your result. Your housing deduction should reflect the IRS allowance for your specific county.
5. Missing the Payroll Tax Deduction
You can deduct payroll taxes (Social Security tax, Medicare tax) that are actually being withheld from your pay. Self-employed filers can deduct the self-employment tax. This is separate from income taxes and is often overlooked.
The Means Test Forms
The means test is completed on Official Bankruptcy Forms:
| Form | Purpose | Who Files It |
|---|---|---|
| Form 122A-1 | Chapter 7 Statement of Your Current Monthly Income | All individual Chapter 7 filers |
| Form 122A-1Supp | Statement of Exemption from Presumption of Abuse (military/veteran) | Qualifying military/veteran filers only |
| Form 122A-2 | Chapter 7 Means Test Calculation | Above-median filers only (Step 2) |
| Form 122C-1 | Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period | All Chapter 13 filers |
| Form 122C-2 | Chapter 13 Calculation of Your Disposable Income | Chapter 13 filers (determines plan payment) |
These forms are available from the U.S. Courts website. While the forms themselves are straightforward, the underlying calculations -- particularly the IRS expense allowances and the marital adjustment -- can be complex. Many filers use a means test calculator to verify their results before filing.
Means Test vs. Chapter 13 Disposable Income
An important distinction: the means test for Chapter 7 and the disposable income calculation for Chapter 13 use similar inputs but serve different purposes.
In Chapter 7, the means test determines whether you can file at all. Pass = proceed. Fail = no Chapter 7.
In Chapter 13, a similar calculation (Form 122C-2) determines how much you must pay into your plan each month and whether your plan lasts 3 or 5 years. Below-median filers may propose a 3-year plan. Above-median filers must commit to 5 years. The disposable income figure sets the minimum monthly payment to unsecured creditors.
This means the same income that disqualifies you from Chapter 7 directly increases your Chapter 13 plan payment. Higher income does not just push you to Chapter 13 -- it pushes you to a larger, longer plan.
Frequently Asked Questions
About This Data
Statistics on this site are derived from the Federal Judicial Center Integrated Database, which contains records for over 4.9 million bankruptcy cases across all 94 federal districts. Median income thresholds are published by the U.S. Trustee Program based on Census Bureau data.
This is an educational resource, not legal advice. Consult a qualified attorney for your specific situation.
Cited in Federal Rules Suggestion 26-BK-3The research methodology behind this data has been submitted to and accepted by the Advisory Committee on Bankruptcy Rules as Rules Suggestion 26-BK-3.