Use this calculator to estimate whether you might qualify for Chapter 7 bankruptcy based on the Means Test. This tool helps compare your income and allowed expenses against federal and state guidelines.
You must look up the current median income for your state and household size.
This is your gross income from all sources, averaged over the last 6 full calendar months.
Allowed Monthly Expenses (for above-median income filers):
These are standardized expenses, not necessarily your actual expenses. Consult official IRS guidelines or an attorney.
Understanding the Chapter 7 Means Test
The Chapter 7 Means Test is a crucial part of the bankruptcy process designed to determine if an individual's income is low enough to qualify for Chapter 7 bankruptcy. Chapter 7, often referred to as "liquidation" bankruptcy, allows debtors to discharge most unsecured debts without a repayment plan. The Means Test was introduced to prevent higher-income debtors from filing Chapter 7 when they could reasonably afford to repay some of their debts through a Chapter 13 plan.
How the Means Test Works
The test primarily involves two stages:
Median Income Test: The first step compares your "current monthly income" (CMI) to the median income for a household of the same size in your state. Your CMI is generally the average of your gross income from all sources over the six full calendar months preceding your bankruptcy filing. If your CMI is below the state's median income, you generally pass the Means Test and are presumed eligible for Chapter 7.
Disposable Income Test (for above-median income filers): If your CMI is above the state's median income, you proceed to the second part of the test. This involves calculating your "disposable income" by subtracting certain allowed expenses from your CMI. These allowed expenses are not necessarily your actual expenses but are standardized amounts set by the IRS for living expenses, along with actual payments for secured debts (like mortgages and car loans), priority debts (like child support or certain taxes), and other specific deductions (like health insurance premiums).
Key Terms Explained
Current Monthly Income (CMI): This is a critical figure, calculated by averaging your gross income from all sources (wages, business income, rental income, etc.) over the six full calendar months before you file for bankruptcy.
State Median Income: This is a benchmark income level published by the U.S. Department of Justice, which varies by state and household size. It's updated periodically.
Allowed Expenses: These are specific deductions permitted by the Means Test. They include national and local IRS expense standards for food, clothing, housing, transportation, and healthcare, as well as actual payments for secured debts, priority debts, and certain other necessary expenses.
Disposable Income: If your CMI is above the state median, this is the amount remaining after subtracting all allowed expenses. This figure is then multiplied by 60 (representing 60 months or 5 years) to determine if you have sufficient income to repay a significant portion of your unsecured debts.
Passing or Failing the Test
Passing: If your CMI is below the state median, or if your disposable income over 60 months falls below a certain threshold (e.g., less than $9,075 as of recent guidelines), you generally pass the Means Test and are eligible for Chapter 7.
Presumption of Abuse: If your disposable income over 60 months exceeds a higher threshold (e.g., more than $15,175 as of recent guidelines), there is a "presumption of abuse," meaning you are presumed ineligible for Chapter 7. In such cases, you might need to file Chapter 13 or demonstrate "special circumstances" to rebut the presumption.
Gray Area: If your disposable income falls between the lower and higher thresholds, the test becomes more complex, often involving a comparison to 25% of your non-priority unsecured debt. In these situations, a presumption of abuse may still arise, but it can often be rebutted with a strong showing of special circumstances.
Important Disclaimer
This calculator provides an estimate based on simplified Means Test rules and current thresholds. The actual Means Test is complex and involves specific legal interpretations and documentation. Income and expense figures, as well as median income levels and thresholds, change periodically. This tool is for informational purposes only and does not constitute legal advice. You should always consult with a qualified bankruptcy attorney to discuss your specific situation and determine your eligibility for Chapter 7 bankruptcy.
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function calculateMeansTest() {
var householdSize = parseFloat(document.getElementById("householdSize").value);
var stateMedianIncomeAnnual = parseFloat(document.getElementById("stateMedianIncome").value);
var currentMonthlyIncome = parseFloat(document.getElementById("currentMonthlyIncome").value);
var allowedLivingExpenses = parseFloat(document.getElementById("allowedLivingExpenses").value);
var securedDebtPayments = parseFloat(document.getElementById("securedDebtPayments").value);
var priorityDebtPayments = parseFloat(document.getElementById("priorityDebtPayments").value);
var healthInsurancePremiums = parseFloat(document.getElementById("healthInsurancePremiums").value);
var healthSavingsAccount = parseFloat(document.getElementById("healthSavingsAccount").value);
var termLifeInsurance = parseFloat(document.getElementById("termLifeInsurance").value);
var educationExpenses = parseFloat(document.getElementById("educationExpenses").value);
var charitableContributions = parseFloat(document.getElementById("charitableContributions").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(householdSize) || householdSize <= 0 ||
isNaN(stateMedianIncomeAnnual) || stateMedianIncomeAnnual < 0 ||
isNaN(currentMonthlyIncome) || currentMonthlyIncome < 0 ||
isNaN(allowedLivingExpenses) || allowedLivingExpenses < 0 ||
isNaN(securedDebtPayments) || securedDebtPayments < 0 ||
isNaN(priorityDebtPayments) || priorityDebtPayments < 0 ||
isNaN(healthInsurancePremiums) || healthInsurancePremiums < 0 ||
isNaN(healthSavingsAccount) || healthSavingsAccount < 0 ||
isNaN(termLifeInsurance) || termLifeInsurance < 0 ||
isNaN(educationExpenses) || educationExpenses < 0 ||
isNaN(charitableContributions) || charitableContributions < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var stateMedianIncomeMonthly = stateMedianIncomeAnnual / 12;
var resultHtml = "";
// Step 1: Median Income Test
if (currentMonthlyIncome < stateMedianIncomeMonthly) {
resultHtml += "Median Income Test Result: You likely PASS the Chapter 7 Means Test.";
resultHtml += "Your average current monthly income ($" + currentMonthlyIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ") is below the state's median income for your household size ($" + stateMedianIncomeMonthly.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ").";
resultHtml += "This typically means you are presumed eligible for Chapter 7 bankruptcy.";
} else {
resultHtml += "Median Income Test Result: Your average current monthly income ($" + currentMonthlyIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ") is above the state's median income for your household size ($" + stateMedianIncomeMonthly.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + ").";
resultHtml += "Proceeding to the Disposable Income Test.";
// Step 2: Disposable Income Test
var totalAllowedExpenses = allowedLivingExpenses + securedDebtPayments + priorityDebtPayments +
healthInsurancePremiums + healthSavingsAccount + termLifeInsurance +
educationExpenses + charitableContributions;
var disposableIncome = currentMonthlyIncome – totalAllowedExpenses;
var projectedDisposableIncome60Months = disposableIncome * 60;
// Means Test Thresholds (these change, using common reference points)
var lowerThreshold60Months = 9075; // As of recent guidelines
var upperThreshold60Months = 15175; // As of recent guidelines
resultHtml += "Calculated Total Allowed Monthly Expenses: $" + totalAllowedExpenses.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
resultHtml += "Calculated Monthly Disposable Income: $" + disposableIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
resultHtml += "Projected Disposable Income over 60 Months: $" + projectedDisposableIncome60Months.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
if (projectedDisposableIncome60Months < lowerThreshold60Months) {
resultHtml += "Disposable Income Test Result: You likely PASS the Chapter 7 Means Test.";
resultHtml += "Your projected disposable income over 60 months is below the threshold of $" + lowerThreshold60Months.toLocaleString('en-US') + ".";
} else if (projectedDisposableIncome60Months >= upperThreshold60Months) {
resultHtml += "Disposable Income Test Result: There is a PRESUMPTION OF ABUSE.";
resultHtml += "Your projected disposable income over 60 months is above the threshold of $" + upperThreshold60Months.toLocaleString('en-US') + ". This suggests you may not qualify for Chapter 7 bankruptcy.";
} else {
resultHtml += "Disposable Income Test Result: Your situation falls into a GRAY AREA.";
resultHtml += "Your projected disposable income over 60 months is between $" + lowerThreshold60Months.toLocaleString('en-US') + " and $" + upperThreshold60Months.toLocaleString('en-US') + ". A presumption of abuse may still arise, but it could potentially be rebutted by demonstrating special circumstances. This often involves comparing your disposable income to 25% of your non-priority unsecured debt.";
}
resultHtml += "It is highly recommended to consult with a qualified bankruptcy attorney for a precise evaluation.";
}
resultDiv.innerHTML = resultHtml;
}