Bankruptcy Means Test 2026: Do You Qualify for Chapter 7?
The bankruptcy means test is the eligibility gateway for Chapter 7. Created in 2005 to prevent high-income filers from using Chapter 7, it’s less complex than it sounds — and most bankruptcy filers qualify automatically at the first step.
Step 1: Compare Income to State Median
Calculate your average monthly gross income from all sources for the 6 full calendar months before your filing month. Multiply by 12 for your annualized figure. Compare to your state’s current median income for your household size at justice.gov/ust/means-testing.
Include: wages, business income, rental income, pension/retirement, regular household contributions. Exclude: Social Security benefits (fully excluded by law).
Example: 6 months income = $15,600 total → $2,600/month average → $31,200 annualized. Single household in most states: median is $50,000–$75,000. Result: well below median → automatic Chapter 7 qualification.
Step 2: Full Calculation (If Above Median)
If your annualized income exceeds your state’s median, complete Form 122A-2 to calculate “current monthly disposable income” after IRS-allowed expenses. Allowed expenses are based on IRS National and Local Standards for food, housing, transportation, and healthcare — not your actual spending in most categories.
If your monthly disposable income is below $83 after allowed expenses: qualify. Between $83–$166: further calculation. Above $166 ($1,992 annualized): fail the means test.
Key Allowed Expenses on Form 122A-2
- Food, clothing, hygiene: IRS national standards by family size
- Housing and utilities: IRS local standards for your county
- Transportation: IRS local standards plus actual insurance and maintenance
- Mandatory payroll deductions: Taxes, retirement contributions, health insurance
- Secured debt payments: Actual mortgage and car loan payments
- Healthcare: IRS standards plus actual out-of-pocket costs
If You Fail the Means Test
- File Chapter 13: No income test — need sufficient income to fund a repayment plan. See Chapter 7 vs Chapter 13.
- Retest in future months: The test uses a 6-month average. If income recently dropped, waiting for lower-income months to enter the window may change results.
- Review expense calculations: Above-median filers sometimes qualify after carefully completing all allowed expenses.
Common Mistakes
- Including Social Security benefits (they’re legally excluded)
- Using actual food/clothing spending instead of IRS national standards
- Using outdated median income figures — always use justice.gov/ust current version
- Forgetting to include all household members’ income
FAQ
Does the means test check assets?
No — it’s based entirely on income and allowed expenses. Asset evaluation happens separately through the bankruptcy schedules and exemption analysis.
What if I just got a new higher-paying job?
The test uses the 6 full months before filing, not current income. However, trustees and judges can consider current circumstances for good faith analysis. If income recently increased significantly, consult an attorney before filing.
Free Means Test Worksheet
Step-by-step calculator to determine your Chapter 7 eligibility in minutes.
