The Bankruptcy Means Test: Do You Qualify?

The means test is the income screen that decides whether you can file Chapter 7 bankruptcy. If your household income is below the median for your state and household size, you pass automatically and can proceed. If it is above the median, a second calculation weighs your income against allowed living expenses to see whether you could realistically repay creditors instead.

What Is the Bankruptcy Means Test?

Congress added the means test in 2005 to stop higher-income filers from erasing debt in Chapter 7 when they could afford to pay some of it back. It lives in 11 U.S.C. § 707(b), which lets a court dismiss a Chapter 7 case (or convert it to Chapter 13) when allowing the discharge would be an "abuse" of the system. The test turns that abstract idea into a math problem with two parts.

The first part is a straight income comparison. The second part, which you only reach if you fail the first, subtracts a set of allowed expenses from your income to measure your disposable income — the money left over each month that could go toward debt. The test applies to people whose debts are primarily consumer debts. If most of what you owe is business debt, you generally skip the test entirely.

Passing is not the same as having no money. Plenty of working households pass because their income sits below the state median, and plenty of others pass the second part because their allowed expenses consume most of what they earn.

The Income Limit Step

The first step compares your income to your state's median for a household your size. Bankruptcy uses a specific income figure called current monthly income: the average of your gross income over the six full calendar months before you file, multiplied by twelve. Come in under the median and you have passed the means test. Nothing more is required.

There is no national income cutoff, because the median is set state by state and refreshed periodically. The spread is wide. Under the figures effective April 1, 2026, the median income for a one-person household runs from $53,978 in Mississippi to $88,585 in Washington among the 50 states (a few U.S. territories sit lower). For a family of four, medians reach into the six figures in higher-cost states. Each additional household member above four adds $11,100 to the applicable figure.

Because the number that matters is your own state's, the income limit is effectively a local one. Two households with identical paychecks can land on opposite sides of the line simply because they live in different states. To see your exact figure for your household size, use the bankruptcy Chapter 7 means test calculator, which pulls the current median for every state. That same median threshold also decides broader Chapter 7 bankruptcy income limit questions beyond the means test itself.

Allowed Expense Deductions

If your income is above the median, you move to the second part of the test, where allowed expenses are subtracted from your income. Some of these deductions come from the IRS National Standards, a fixed monthly allowance for everyday living costs that applies the same across the country. You get the standard amount whether or not you actually spend it, which keeps the calculation consistent.

The National Standards scale with household size, so a family of four gets a larger allowance in every category than a single filer. On top of these fixed amounts, the calculation lets you deduct actual costs the standards do not cover: required taxes, mandatory payroll deductions, court-ordered payments like child support, health insurance premiums, and the monthly payments on secured debts such as a mortgage or car loan. These deductions are separate from the property you get to keep, which is governed by bankruptcy exemptions under federal or state law.

Housing and Transportation Allowances

Two of the largest deductions come from the IRS Local Standards rather than the national ones, because housing and transportation costs vary far too much by location to use a single figure. The housing and utilities allowance is set by county, and the transportation allowance depends on the region of the country and whether you own or lease a vehicle. Unlike the National Standards, the amount you can claim here is often capped at the local figure even if your real costs run higher.

Because these numbers are tied to your specific county and can shift with each IRS update, we do not reproduce a fixed table for them here. The Chapter 7 means test calculator applies the correct local housing and transportation figures for your area once you enter your location, which is the reliable way to handle this part of the test.

What Happens If You Don't Pass

Failing the means test is not the end of bankruptcy for you. It mainly closes the door to Chapter 7. If the calculation shows you have enough disposable income to repay a meaningful share of your debts, the court can treat a Chapter 7 filing as abuse under § 707(b) and dismiss it. The practical answer in that situation is Chapter 13.

Chapter 13 has no means-test income ceiling. Instead of erasing debt in a few months, filing for Chapter 13 bankruptcy reorganizes what you owe into a repayment plan lasting three to five years, sized to what you can actually afford. It also lets you keep property a Chapter 7 trustee might otherwise sell and can stop a foreclosure by letting you catch up on missed mortgage payments over time. For many people who fail the test, that trade is worth it.

Whether Chapter 13 fits depends on your goals, not just your income. If you are still deciding, our guide comparing Chapter 13 bankruptcy versus Chapter 7 walks through the choice, and the side-by-side Chapter 13 vs Chapter 7 bankruptcy comparison lays out the differences in cost, timeline, and what you keep.

How to Calculate Your Means Test

You can work through the test yourself before you ever talk to a lawyer. The sequence is short:

1. Add up your last six months of gross income from all sources, average it per month, and multiply by twelve to get your current monthly income.
2. Find your state's median for your household size and compare. If you are below it, you pass and can stop here.
3. If you are above the median, subtract the allowed expenses — the IRS National Standards, the local housing and transportation allowances, required taxes and deductions, and secured-debt payments.
4. Look at what remains. If your leftover monthly disposable income is low enough under the § 707(b) thresholds, you can still qualify for Chapter 7. If it is high, Chapter 13 is the likely path.

A means test result is a starting point, not a verdict. The rules include exceptions for disabled veterans and active-duty service members, and a court can weigh the totality of your circumstances even when the math is borderline. If your income is close to the line, that is exactly the case worth reviewing with a bankruptcy attorney before you file.