This calculator helps determine if you pass the 'disposable income' test for Chapter 13 bankruptcy.
Your Income & Expenses
Secured Debts (Monthly Payments)
Unsecured Debts (Monthly Payments)
Living Expenses (Allowable Deductions)
These are estimated averages based on IRS guidelines. Actual allowable amounts can vary based on location and specific circumstances.
Results
Understanding the Chapter 13 Means Test
The Chapter 13 Means Test is a crucial part of filing for Chapter 13 bankruptcy in the United States. Its primary purpose is to determine whether an individual's income is too high to qualify for Chapter 7 bankruptcy and, therefore, whether they are presumed to have the ability to repay some of their debts through a Chapter 13 repayment plan.
How it Works: The Two Prongs
The Means Test has two main parts:
The 'Above Median Income' Test: This part compares your average income over the last six months to the median income for a household of your size in your state. If your income is below the median, you generally pass this part and may qualify for Chapter 7 without further income analysis.
The 'Disposable Income' Test: If your income is above the median, you must then undergo the 'disposable income' calculation. This is what the calculator above primarily helps you estimate. The court looks at your income and then subtracts certain allowed expenses. If you have significant 'disposable income' remaining after these deductions, you may be presumed unable to proceed with Chapter 7 and would likely need to file Chapter 13.
Disposable Income Calculation Explained
The calculation for disposable income in Chapter 13 is complex and involves subtracting specific categories of expenses from your current monthly disposable income. The primary goal is to see if you have enough money left over after essential living expenses and certain debt payments to fund a Chapter 13 plan for at least 3 years (or 5 years if your income is above the median and your debts exceed certain thresholds).
Key Expense Categories Subtracted:
Secured Debts: Payments on debts secured by property (like mortgages and car loans) are generally allowed deductions.
Priority Unsecured Debts: Certain debts that are given priority by law, such as recent taxes, domestic support obligations (alimony, child support), and certain wage claims.
Stipulated Living Expenses: These are amounts allowed by the IRS guidelines for essential living costs. They are not necessarily your actual expenses but what the IRS deems reasonable for a household of your size in your area. These typically include:
Housing and Utilities (rent/mortgage, property taxes, utilities)
Food
Child care and education
Healthcare (insurance, medical bills)
Transportation (car payments, maintenance, public transport)
Other necessities (clothing, appliances, etc.)
Non-priority Unsecured Debts: Payments on unsecured debts like credit cards and medical bills are generally NOT deducted in the same way as secured debts for the purpose of calculating disposable income. However, the *actual* debt amounts are considered when determining how much you might pay through a Chapter 13 plan.
Interpreting the Result
The calculator estimates your monthly disposable income. A higher disposable income figure suggests you may be more likely to fall into Chapter 13, as it indicates you have funds available to pay creditors. Conversely, a lower figure might suggest you could potentially qualify for Chapter 7, though this is not a guarantee.
Disclaimer: This calculator is an educational tool and should not be considered legal advice. Bankruptcy laws are complex and vary by jurisdiction. Consulting with a qualified bankruptcy attorney is essential to understand your specific situation and options.
// — Means Test Calculation Logic —
function calculateMeansTest() {
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value) || 0;
var householdSize = parseInt(document.getElementById("householdSize").value) || 1;
// Secured Debts
var mortgageRent = parseFloat(document.getElementById("mortgageRent").value) || 0;
var carPayments = parseFloat(document.getElementById("carPayments").value) || 0;
var otherSecured = parseFloat(document.getElementById("otherSecured").value) || 0;
// Unsecured Debts (relevant for context but less direct impact on *this specific* disposable income calculation for Chapter 13)
var creditCardPayments = parseFloat(document.getElementById("creditCardPayments").value) || 0;
var medicalPayments = parseFloat(document.getElementById("medicalPayments").value) || 0;
var otherUnsecured = parseFloat(document.getElementById("otherUnsecured").value) || 0;
// Allowable Living Expenses (These should be based on IRS guidelines for your district. This calculator uses placeholders you must fill in.)
var foodAllowable = parseFloat(document.getElementById("foodAllowable").value) || 0;
var housingAllowable = parseFloat(document.getElementById("housingAllowable").value) || 0;
var utilitiesAllowable = parseFloat(document.getElementById("utilitiesAllowable").value) || 0;
var transportationAllowable = parseFloat(document.getElementById("transportationAllowable").value) || 0;
var healthInsuranceAllowable = parseFloat(document.getElementById("healthInsuranceAllowable").value) || 0;
var childCareAllowable = parseFloat(document.getElementById("childCareAllowable").value) || 0;
var otherLivingAllowable = parseFloat(document.getElementById("otherLivingAllowable").value) || 0;
var resultElement = document.getElementById("result");
var resultHTML = "";
// — Basic Validation —
if (monthlyIncome < 0 || householdSize < 1 || mortgageRent < 0 || carPayments < 0 || otherSecured < 0 || creditCardPayments < 0 || medicalPayments < 0 || otherUnsecured < 0 || foodAllowable < 0 || housingAllowable < 0 || utilitiesAllowable < 0 || transportationAllowable < 0 || healthInsuranceAllowable < 0 || childCareAllowable < 0 || otherLivingAllowable < 0) {
resultHTML = "Please enter valid non-negative numbers for all fields.";
resultElement.style.backgroundColor = "#ffc107"; // Warning yellow
resultElement.innerHTML = resultHTML;
return;
}
// — Core Calculation for Disposable Income —
// In Chapter 13, disposable income is generally calculated as:
// (Current Monthly Income) – (Allowed Living Expenses) – (Allowed Secured Debt Payments)
// Note: Allowable living expenses are often based on IRS regional standards.
// Note: Priority unsecured debts (like child support, recent taxes) would also be deducted, but are not explicit inputs here.
// Note: The "Above Median Income" test uses median income data, which is not directly calculated here but is a prerequisite.
var totalSecuredPayments = mortgageRent + carPayments + otherSecured;
var totalAllowableLivingExpenses = foodAllowable + housingAllowable + utilitiesAllowable + transportationAllowable + healthInsuranceAllowable + childCareAllowable + otherLivingAllowable;
var disposableIncome = monthlyIncome – totalAllowableLivingExpenses – totalSecuredPayments;
// — Result Interpretation —
// This calculation is simplified. A full Means Test involves median income comparison and specific IRS expense tables.
// The key is the disposable income figure.
var interpretation = "";
var backgroundColor = "#28a745"; // Success green
if (disposableIncome < 0) {
disposableIncome = 0; // Cannot have negative disposable income for payment purposes
interpretation = "Your estimated monthly disposable income is very low or negative.";
backgroundColor = "#17a2b8"; // Info blue
} else if (disposableIncome < 150) { // Arbitrary threshold for illustration
interpretation = "Your estimated monthly disposable income is relatively low. You may still qualify for Chapter 7, but a full Means Test analysis is required.";
backgroundColor = "#ffc107"; // Warning yellow
} else {
interpretation = "Your estimated monthly disposable income is significant. You may be presumed to have the ability to pay creditors through Chapter 13.";
backgroundColor = "#dc3545"; // Danger red
}
resultHTML = "Estimated Monthly Disposable Income: $" + disposableIncome.toFixed(2) + "" + interpretation;
resultElement.style.backgroundColor = backgroundColor;
resultElement.innerHTML = resultHTML;
}