How The Bankruptcy Means Test Works
The “means test” is a form that is mandated by bankruptcy law. Each year the United
States Bankruptcy Trustee’s office publishes the median family income for families (or
individuals) in each state. This information is derived from the United States census
bureau. Median family income is the point where one-half of all family incomes are above
and one-half are below. Like the median in a road which equally divides the road. If your
taxable family income is above the median family income for your state, then you must
“take the means test,” in other words, complete the Means Test form.
The means test is designed to see if you have the “means” to file a Chapter 13 bankruptcy.
If the means test shows that after you have been credited with all the living expenses
allowed on the Means Test form (not including your unsecured debt) you have a certain
amount of monthly disposable income, then you must file a Chapter 13 bankruptcy and
commit all your monthly disposable income as shown on the Means Test form toward a
Chapter 13 repayment plan of usually 60 months.
You should not make a determination that you are qualified for either Chapter 7 or Chapter
13 bankruptcy by taking the means test on your own. There are U.S. Trustee guidelines
and court decisions which bear on the result of the means test.
Find Out If Bankruptcy Makes Sense For You
For more information about how to find out if you qualify for bankruptcy, we invite you to take a moment with our dedicated lawyers. We are available at 877-824-8147 or you can send us an email. We offer reasonable fees and affordable payment plans.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.