Means Test (Bankruptcy)
What is the bankruptcy means test?
The means test is the income-based screen that decides whether someone qualifies to file Chapter 7 bankruptcy or must file Chapter 13 instead. It compares the filer's average income over the 6 months before filing against their state's median income for a household of the same size. Income at or below the median generally passes; income above it triggers a second calculation involving allowed expenses and deductions before a final result is set.
Key takeaways
- The means test is an income-based screen that decides whether a filer qualifies for Chapter 7, or must file Chapter 13 instead.
- It compares the filer's average income over the 6 months before filing to their state's median income for a household of the same size.
- Income at or below the state median generally passes the test without further calculation; income above it triggers a second, more detailed calculation involving allowed expenses and deductions.
- The dollar threshold isn't one fixed number — it varies by state and household size, and it's updated periodically, so it should always be confirmed rather than assumed from something read elsewhere.
- Passing or failing the means test doesn't decide whether a car loan can be kept — that's a separate set of choices covered under reaffirming, redeeming, or surrendering the vehicle.
What is the bankruptcy means test?
The means test is an income-based screen that decides whether a filer qualifies for Chapter 7 bankruptcy, or is instead required to file Chapter 13. It exists to keep filers with enough income to repay some of their debt out of Chapter 7, which discharges most unsecured debt without a repayment plan.
Nothing about the means test decides your credit score, your car loan, or your ability to buy a vehicle afterward. It answers one question: which chapter can you file under.
How does the means test actually work?
It compares your income to your state's median income for a household your size, and runs a second calculation if you're above it.
| Step | What happens |
|---|---|
| 1. Calculate average income | Average gross income over the 6 months before filing, not income at the moment of filing |
| 2. Compare to the state median | Measured against your state's median income for a household of the same size |
| 3. At or below the median | Generally passes the means test without further calculation |
| 4. Above the median | A second, more detailed calculation applies, using allowed expenses and deductions |
The two-step structure matters. Being above the median doesn't end the analysis — it starts a more detailed one.
What income figure does it use?
Generally, average gross income over the 6 months immediately before the filing date, not a snapshot of current income and not projected future income. A filer who lost a job the week before filing, or who just started a higher-paying one, can have a means-test average that looks different from their income right now.
This is a specific, mechanical calculation, and it's one of the places where getting the math wrong can affect the outcome. An attorney or a certified bankruptcy petition preparer handles this calculation as a matter of course.
What if my income is above the state median?
You're not automatically disqualified from Chapter 7. A second calculation applies, subtracting allowed expenses and certain debt payments from your income to arrive at what's left over. Some filers above the median still qualify for Chapter 7 once this fuller calculation runs, because their actual disposable income after allowed expenses is lower than their raw income number suggested.
This is where the means test gets genuinely complicated, and it's the step most worth paying for professional help on rather than estimating yourself.
Does the means test have a specific dollar threshold?
Not one fixed number. The threshold is your state's median income for a household of your size, and it changes by state, by household size, and is updated periodically. This site doesn't publish a specific dollar figure, because stating one would be wrong the moment it goes stale or doesn't match your state.
Confirm the current figure for your state and household size directly rather than relying on a number you saw somewhere else, since an outdated or wrong figure can change which chapter you think you qualify for.
Does the means test decide what happens to my car?
No. The means test only sorts you into a chapter. What happens to a financed vehicle inside Chapter 7 — reaffirming the loan, redeeming the car, or surrendering it — is a separate set of choices made afterward. See can I keep my car in Chapter 7 bankruptcy for how that decision works.
For the bigger picture on financing before, during, and after a bankruptcy filing, see car loan after bankruptcy.
Common questions
What is the bankruptcy means test?
It's an income-based test that determines whether a filer qualifies for Chapter 7 bankruptcy or is required to file Chapter 13 instead. It compares average income over the 6 months before filing to the median income for the filer's state and household size.
What income figure does the means test use?
Generally the filer's average gross income over the 6 months immediately before filing, not their income on the day they file or going forward. This average is compared against the state's median for a household of the same size.
What happens if my income is above the median?
You aren't automatically disqualified from Chapter 7. A second calculation applies, factoring in allowed expenses and deductions, and some filers above the median still qualify once that calculation runs. This step is where an attorney's help matters most.
Does the median income threshold have a fixed dollar amount?
No single number applies everywhere. It varies by state and by household size, and the figures are updated periodically, so a specific dollar threshold should always be confirmed for your state and family size rather than assumed.
Does passing the means test guarantee I keep my car?
No. The means test only decides which bankruptcy chapter you can file under. What happens to a financed vehicle in Chapter 7 — reaffirm, redeem, or surrender — is a separate decision made afterward.
Sources
- Bankruptcy Basics — Administrative Office of the U.S. Courts