Means Test

Why it matters

The test is the main gatekeeper between chapters. Filers whose income falls at or below the state median generally pass without further math. Filers above the median complete a second stage that subtracts allowed expenses to see whether enough income remains to repay creditors — if it does, a Chapter 7 filing may be presumed abusive, and Chapter 13's repayment plan becomes the likelier route. The details are famously technical: what counts as income, which expenses are allowed, and several exceptions all shift the result, and the median figures are updated periodically by the U.S. Trustee Program. Passing or failing on a DIY calculation is not something to rely on.

Example

Alex, supporting a household of three, earns less than his state's median for that household size — he generally passes the means test and can file Chapter 7 if the rest of his case fits. His sister, with higher income, must complete the full expense calculation; after allowed deductions she shows meaningful money left over each month, so her attorney walks her through what a Chapter 13 plan would look like instead.