What is the means test?

You may have read that the new bankruptcy law imposes a "means test" on who can file for Chapter 7 bankruptcy.

You might think this new test will prevent you from filing. But, chances are, you're wrong. Most people considering bankruptcy have no trouble passing the means test. Indeed, some lawyers think more people will qualify for Chapter 7 under this test than under the old law, where judges had no fixed formula.

Use this calculator find out where you stand.

The Formula

The law now uses a standard mathematical formula to determine whether you can file for Chapter 7 -- or, to put it in legal terms, whether filing for Chapter 7 would be an 'abuse' of the bankruptcy system. (Those who fail the means test, are left with a Chapter 13 repayment plan as their only bankruptcy option.)

The means test is actually a two-part test and you only need to pass one of them to qualify for Chapter 7.

Test 1. "Median Income"
This is a very simple test that compares your average household income for the past six calendar months to the median income for your state, If your income is below the median, you qualify for Chapter 7. If it is above the median, you must pass Test 2.

Test 2. "Disposable Income"
This test deducts expenses from your income to determine how much you can pay your unsecured creditors over the next five years:

• If you can pay at least $10,950 ($182.50 per month), you can't file for Chapter 7.
• If you can pay at least $6,575 ( about $110 per month) and that is at least 25% of what you currently owe your unsecured creditors, you can't file for Chapter 7.
• If your disposable income is less than $110 per month, you can file for Chapter 7.

Certain deductions are standard allowances based on the number of vehicles you operate, the number of people in your household, and the cost of living in your county.

In addition, to these standard deductions, you can also deduct the full amount of certain actual expenses such as mortgage and vehicle loan payments.

Do I need to complete the means test?

If you are filing for Chapter 13 bankruptcy, you do not need to complete the means test. However, you do need to complete a form almost identical to it — and that will determine how much you must pay in a Chapter 13 plan.

If you want to file for Chapter 7 bankruptcy, you must at least complete the first part of the form to figure your "current monthly income" (CMI), which is based on your average income over the past six calendar months. That number will determine whether you must complete the rest of the form.

If your CMI is below the median income for your state for a household your size, then you do not need to complete the means test.

If your CMI is higher than the median for your state for a household your size, you must complete the means test to compute your monthly "disposable" income (that is, income minus expenses). The result of that computation will determine whether you are eligible for Chapter 7 bankruptcy.

How long does this take?

Using this calculator takes about 20 minutes. For some, the answer may be obvious after only a few questions.

Is it private?

This calculator is completely anonymous. We do not ask -- and no not want -- any personally identifying information linking you to these numbers, other than a zip code. We do keep statistical data on amounts that user have entered, so that the site may monitor the needs of its users and adjust services accordingly. However, To us, this is data for statistical analysis only.

Garbage in, garbage out

If you don't put in the correct numbers in the correct blanks, this calculator won't give you an accurate result. It only does the math. It is your responsibility to put the right numbers in the right blanks. Helpful resources are available throughout the test to help you figure out what the form is asking for and what to put where.

Be sure to account for all the different kinds of income you receive. If you're not sure what to put in an 'expense' blank, skip it. You may find that it doesn't' matter -- that is, you may qualify regardless of what number you put in that blank.

If you need assistance, this website has listing of books and local lawyers that offer bankruptcy help.

Where to find the Official Means Test form

If you end up actually filing for Chapter 7 bankruptcy you need to fill out official form (22A). which you can find here. This calculator is based on that form.

Why do you need my zip code?

We do not ask any identifying information other than a zip code..
You will be assigned a random number that will track your means test by setting a cookie. NOTE: You must allow cookies to use the calculator.

Nolo's Bankruptcy Means Test Calculator...
as of October 1, 2012, has been recombined with the orignial means test calulator, at LegalConsumer.com.

This is the same calculator that Nolo licensed for several years from LegalConsumer.com. It is still operated and maintained by Albin Renauer, co-author of Nolo's book "How to File for Chapter 7 Bankruptcy."

When you enter your zip code below, you will be taken to the means test calculator at the LegalConsumer.com website.

We do not ask any identifying information other than a zip code.
You will be assigned a random number that will track your means test by setting a cookie. NOTE: You must allow cookies to use the calculator.

Enter Your Zip Code* 
 

Help Topics

• What is the Means Test?
• Do I need to complete the Means Test?
• How long does it take?
• Why do you need my zip code?