What is means test?
The means test is the two-step income calculation required under 11 U.S.C. § 707(b) that applies when your debts are mostly consumer debts (some veterans and service members are exempt) and tests whether a Chapter 7 filing is presumed to be an abuse of the chapter. Step one compares your household's current monthly income to your state's median income. If you are below the median, you pass automatically. If above, step two deducts allowed expenses to calculate your projected disposable income — if too high, the filing can be presumed abusive and dismissed or, with your consent, converted to Chapter 13.
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Key facts
- The means test was introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 to prevent high-income filers from abusing Chapter 7. Before BAPCPA, cases could already be dismissed for substantial abuse.
- Current monthly income (CMI) is calculated as the average of income included under bankruptcy rules over the 6 full calendar months before filing, with exclusions and adjustments for business and rental operating expenses.
- State median income thresholds vary by location: for a four-person household in the states and District of Columbia, the current U.S. Trustee Program table ranges from $93,672 in West Virginia to $178,524 in Massachusetts, with $11,100 added for each household member above four.
- If your income exceeds the state median, the second step deducts IRS Local and National Standards for housing, transportation, food, and healthcare — plus actual secured debt payments, taxes, and mandatory payroll deductions — to calculate disposable income.
- You fail the means test if your projected 60-month disposable income is at least $17,150. Between $10,275 and $17,150, you fail only if the total would pay at least 25% of your nonpriority unsecured debts.
Related data
- Bankruptcy Filings YoY Change →11.4%, Q3 2026
- Bankruptcy Chapter 7 to Chapter 13 Filing Ratio →1.79 times, Q3 2026
How Does the Means Test Work?
The means test has two steps, and many filers only need to complete the first:
Step 1: Income Comparison
Calculate your "current monthly income" (CMI), the average of income included under bankruptcy rules over the 6 full calendar months before filing, with exclusions and adjustments for business and rental operating expenses. Multiply by 12 to get annualized income. Compare this to your state's median income for your household size:
- Below state median → You pass. No further calculation needed. Other Chapter 7 eligibility requirements still apply.
- Above state median → Proceed to Step 2. At the median, no further means-test calculation is needed.
Social Security benefits, payments to victims of war crimes or terrorism, and certain disability payments are excluded from the CMI calculation.
Step 2: Disposable Income Calculation
If your income exceeds the median, you must calculate your projected monthly disposable income by subtracting allowed deductions:
- IRS National Standards: Food, clothing, household supplies, personal care, and miscellaneous — fixed amounts based on household size
- IRS Local Standards: Housing/utilities (varies by county) and transportation (varies by region), using the applicable standard amounts subject to the adjustments and eligibility rules in Form 122A-2.
- Actual expenses: Taxes, mandatory payroll deductions (Social Security, Medicare), term life insurance, court-ordered payments, education for a disabled child, health insurance, and telecommunications when allowed by the official means-test instructions
- Secured debt payments: Average monthly payment on mortgages, car loans, and other secured debts over the next 60 months
- Priority debt payments: Average monthly payment on priority debts (taxes, child support) over 60 months
The remainder is your projected monthly disposable income.
What If I Fail the Means Test?
Failing the means test does not mean you cannot file bankruptcy — it means you likely cannot file Chapter 7. Your options are:
- File Chapter 13: There is no income ceiling for Chapter 13 (though there are debt limits). Your disposable income helps determine your plan payment.
- Wait and refile: Because the CMI uses a 6-month lookback, a recent job loss, income reduction, or large medical expense can change the result. Some filers wait a few months for the lookback window to shift.
- Special circumstances: Even if the math says you fail, you can argue "special circumstances" under § 707(b)(2)(B) — such as a serious medical condition or military service — that justify additional expenses not captured by the standard deductions.
State Median Income Variations
The U.S. Trustee Program publishes median income tables by state and household size. The current table includes these four-person household examples:
- Higher medians: Massachusetts ($178,524), New Jersey ($168,127), Maryland ($166,173), and Connecticut ($159,934).
- Lower medians: West Virginia ($93,672), Mississippi ($97,464), Arkansas ($97,054), and New Mexico ($98,602).
The IRS Local Standards for housing and transportation also vary by location, so a filer in a high-cost area gets larger deductions in Step 2 even if their income exceeds the median.
State-by-state differences
The means test formula is identical nationwide, but state median income thresholds and IRS Local Standards for housing/transportation vary dramatically, making the same income pass in one state and fail in another.
| State | Key difference |
|---|---|
| New Jersey | Among the higher median income thresholds nationally (four-person household: $168,127). High IRS Local Standards for housing and transportation. More filers pass Step 1 automatically. However, high cost of living means those who fail Step 1 often pass Step 2 after deductions. |
| Mississippi | Among the lower median income thresholds nationally (four-person household: $97,464). Lower IRS Local Standards. More filers fail Step 1 and must complete Step 2. However, lower housing costs also mean Step 2 deductions are smaller. |
| California | High median income (four-person household: $139,071). Very high IRS Local Standards for housing, especially in Bay Area and Los Angeles County — filers who fail Step 1 often pass Step 2 because allowed housing deductions are large. |
| Texas | Moderate median income (four-person household: $117,962). No state income tax, which slightly reduces the deductions available in Step 2 (fewer tax deductions). IRS Local Standards vary significantly between Dallas/Houston/Austin and rural areas. |
| West Virginia | Among the lower median income thresholds nationally (four-person household: $93,672). Lower IRS Local Standards. More filers are pushed to Chapter 13 relative to population. High unemployment and healthcare costs may support special circumstances arguments. |
Questions about means test
What income is included in the means test?
The means test counts income included under bankruptcy rules over the 6 full calendar months before filing, with exclusions and adjustments for business and rental operating expenses. Social Security benefits, payments to war crime victims, and certain disability payments are excluded.
Can I still file bankruptcy if I fail the means test?
Yes — you can file Chapter 13 bankruptcy, which has no income ceiling (only debt limits). You can also wait for the 6-month lookback window to change (if your income has dropped), or argue special circumstances like a serious medical condition or active military service that justify additional expense deductions.
How do I find my state's median income for the means test?
The U.S. Trustee Program publishes current median income tables at justice.gov/ust, updated every April and November. Tables are broken down by state and household size (1 person through 4+ persons, with an additional per-person amount for households larger than 4).
Does the means test apply to Chapter 13?
Not as a qualification barrier — anyone with regular income can file Chapter 13 regardless of income level (subject to debt limits). However, when the disposable-income requirement applies, plans generally last 3 years for filers below the median and 5 years for filers at or above it, but can be shorter if they pay all allowed unsecured claims in full.
What are special circumstances that can override the means test?
Under § 707(b)(2)(B), you can overcome a means test failure by documenting special circumstances such as a serious medical condition, active military duty, recent job loss not yet reflected in the 6-month income average, or other factors that require expenses beyond the IRS standards. You must document the amount and provide a detailed explanation.
Related terms
- Chapter 7 BankruptcyA bankruptcy process that can discharge many debts and may involve selling nonexempt property to pay creditors.
- Chapter 13 BankruptcyA bankruptcy process in which a person with regular income proposes a plan to repay debts over time.
- DischargeA court order that permanently eliminates your legal obligation to pay certain debts at the end of a successful bankruptcy case.
- Automatic StayA bankruptcy protection that generally pauses collection, foreclosure, and some lawsuits when a case is filed.
- TrusteeA neutral third party who handles the foreclosure sale in non-judicial foreclosure states. Also manages bankruptcy cases.
- DefaultA serious failure to meet the terms of your mortgage — usually missing several payments. Default is what triggers the foreclosure process.
- ForeclosureThe legal process where a lender takes your home after you stop making mortgage payments. The process and timeline vary significantly by state.
Sources and method
- 11 U.S.C. § 707(b) — Means Test Statute, at uscode.house.gov
- U.S. Trustee Program — Means Testing Information, at justice.gov
- U.S. Courts — Means Test Forms, at uscourts.gov
- Consumer Financial Protection Bureau — Bankruptcy Resources, at consumerfinance.gov
- U.S. Courts, at uscourts.gov
- U.S. Courts, at uscourts.gov
- U.S. Courts, at uscourts.gov
- United States Code, at uscode.house.gov
We write with assistance from AI tools. Figures come from the data and sources named on this page.